Contrasting Shin-Etsu Chemical (OTCMKTS:SHECY) and Akzo Nobel (OTCMKTS:AKZOY)

Shin-Etsu Chemical (OTCMKTS:SHECY) and Akzo Nobel (OTCMKTS:AKZOY) are both large-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Risk and Volatility

Shin-Etsu Chemical has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Akzo Nobel has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Profitability

This table compares Shin-Etsu Chemical and Akzo Nobel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shin-Etsu Chemical	18.50%	10.67%	8.76%
Akzo Nobel	6.44%	13.96%	4.43%

Institutional & Insider Ownership

0.0% of Shin-Etsu Chemical shares are owned by institutional investors. Comparatively, 0.4% of Akzo Nobel shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.0%. Akzo Nobel pays an annual dividend of $0.96 per share and has a dividend yield of 4.8%. Shin-Etsu Chemical pays out 27.4% of its earnings in the form of a dividend. Akzo Nobel pays out 68.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation and Earnings

This table compares Shin-Etsu Chemical and Akzo Nobel”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shin-Etsu Chemical	$17.10 billion	5.57	$3.15 billion	$0.84	28.57
Akzo Nobel	$11.49 billion	0.89	$718.44 million	$1.40	14.21

Shin-Etsu Chemical has higher revenue and earnings than Akzo Nobel. Akzo Nobel is trading at a lower price-to-earnings ratio than Shin-Etsu Chemical, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Shin-Etsu Chemical and Akzo Nobel, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shin-Etsu Chemical	0	1	0	0	2.00
Akzo Nobel	1	5	0	1	2.14

Summary

Shin-Etsu Chemical beats Akzo Nobel on 8 of the 14 factors compared between the two stocks.

About Shin-Etsu Chemical

Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.

About Akzo Nobel

Akzo Nobel N.V. engages in the production and sale of paints and coatings worldwide. The company operates through two segments: Decorative Paints and Performance Coatings. It offers decorative paints, including paints, lacquers, and varnishes; and a range of mixing machines and color concepts for the building and renovation industry, as well as specialty coatings. The company also provides performance coatings that protect and enhance ships, cars, aircraft, yachts, architectural components, consumer goods, and oil and gas facilities. It offers its products under AkzoNobel, Alabastine, Alba, Andercol, Apla, Armstead Trade, Astral, Astral Batiment, AwlGrip, Brikol, Dulux, Bruguer, Cetabever, Cetol, Chemcraft, Colourland Paints, CONSOLAN, Coral, Cromadex, Cuprinol, Dynacoat, Flexa, Glitsa, Grip-Gard, Herbol, Hammerite, International, Interlux, Innenweis, Interpon, Inca, Luxol, Levis, Lesonal, Molto, Modern Classikk, Maxilite, Mauvilac, Mason CT, Marshall, Mactra, Nordsjo, Oxirite, Protecto, Procolor, Polyfilla, Polycell, Pinotex, Pintuco, Resicoat, Relest, Sparlack, Sadolin, Sikkens, Sea Hawk, Savana, Salcomix, Trimetal, Titanlux, Taubmans, U-tech, Vpowdertech, Vivechrom, Xylazel, Xyladecor, Wanda, and Zweihorn brands. The company serves to energy, packaging, infrastructure, and shipbuilding and maintenance industries, as well as general industries, such as agricultural and construction equipment, construction-related steel, metal fabrication, pipes, appliances, and transportation. The company was formerly known as Akzo NV and changed its name to Akzo Nobel N.V. in 1994. Akzo Nobel N.V. was founded in 1646 and is headquartered in Amsterdam, the Netherlands.