Contrasting LyondellBasell Industries (NYSE:LYB) and Albemarle (NYSE:ALB)

LyondellBasell Industries (NYSE:LYB) and Albemarle (NYSE:ALB) are both large-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Valuation & Earnings

This table compares LyondellBasell Industries and Albemarle”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LyondellBasell Industries	$40.30 billion	0.35	$1.37 billion	($3.75)	-11.58
Albemarle	$5.38 billion	3.14	-$1.18 billion	($1.59)	-90.16

LyondellBasell Industries has higher revenue and earnings than Albemarle. Albemarle is trading at a lower price-to-earnings ratio than LyondellBasell Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares LyondellBasell Industries and Albemarle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LyondellBasell Industries	-3.70%	7.50%	2.53%
Albemarle	-0.43%	0.10%	0.05%

Dividends

LyondellBasell Industries pays an annual dividend of $5.48 per share and has a dividend yield of 12.6%. Albemarle pays an annual dividend of $1.62 per share and has a dividend yield of 1.1%. LyondellBasell Industries pays out -146.1% of its earnings in the form of a dividend. Albemarle pays out -101.9% 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. LyondellBasell Industries has increased its dividend for 14 consecutive years and Albemarle has increased its dividend for 30 consecutive years. LyondellBasell Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for LyondellBasell Industries and Albemarle, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LyondellBasell Industries	4	15	2	0	1.90
Albemarle	2	18	9	1	2.30

LyondellBasell Industries currently has a consensus price target of $53.65, indicating a potential upside of 23.57%. Albemarle has a consensus price target of $120.21, indicating a potential downside of 16.15%. Given LyondellBasell Industries’ higher probable upside, research analysts clearly believe LyondellBasell Industries is more favorable than Albemarle.

Insider and Institutional Ownership

71.2% of LyondellBasell Industries shares are held by institutional investors. Comparatively, 92.9% of Albemarle shares are held by institutional investors. 0.1% of LyondellBasell Industries shares are held by insiders. Comparatively, 0.3% of Albemarle shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

LyondellBasell Industries has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Albemarle has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Summary

Albemarle beats LyondellBasell Industries on 10 of the 18 factors compared between the two stocks.

About LyondellBasell Industries

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.

About Albemarle

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Energy Storage, Specialties and Ketjen. The Energy Storage segment offers lithium compounds, including lithium carbonate, lithium hydroxide, and lithium chloride; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services. The Specialties segment provides bromine-based specialty chemicals, including elemental bromine, alkyl and inorganic bromides, brominated powdered activated carbon, and other bromine fine chemicals; lithium specialties, such as butyllithium and lithium aluminum hydride; develops and manufactures cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications that include airbag initiators. The Ketjen segment offers clean fuels technologies (CFT), which is composed of hydroprocessing catalysts (HPC) together with isomerization and akylation catalysts; fluidized catalytic cracking (FCC) catalysts and additives; and performance catalyst solutions (PCS), which is composed of organometallics and curatives. The company serves the energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection markets. Albemarle Corporation was founded in 1887 and is headquartered in Charlotte, North Carolina.