Huntsman Corporation (NYSE: HUN) and Rayonier Advanced Materials (NYSE:RYAM) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Insider and Institutional Ownership

75.1% of Huntsman Corporation shares are held by institutional investors. Comparatively, 93.5% of Rayonier Advanced Materials shares are held by institutional investors. 19.0% of Huntsman Corporation shares are held by insiders. Comparatively, 2.1% of Rayonier Advanced Materials shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Huntsman Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 1.7%. Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 2.0%. Huntsman Corporation pays out 28.4% of its earnings in the form of a dividend. Rayonier Advanced Materials pays out 35.0% 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Huntsman Corporation and Rayonier Advanced Materials, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Huntsman Corporation 0 1 6 0 2.86
Rayonier Advanced Materials 0 0 5 0 3.00

Huntsman Corporation presently has a consensus target price of $29.14, suggesting a potential upside of 1.76%. Rayonier Advanced Materials has a consensus target price of $18.80, suggesting a potential upside of 37.33%. Given Rayonier Advanced Materials’ stronger consensus rating and higher probable upside, analysts clearly believe Rayonier Advanced Materials is more favorable than Huntsman Corporation.

Risk & Volatility

Huntsman Corporation has a beta of 2.79, meaning that its share price is 179% more volatile than the S&P 500. Comparatively, Rayonier Advanced Materials has a beta of 4.29, meaning that its share price is 329% more volatile than the S&P 500.

Valuation and Earnings

This table compares Huntsman Corporation and Rayonier Advanced Materials’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Huntsman Corporation $9.84 billion 0.70 $1.18 billion $1.76 16.27
Rayonier Advanced Materials $840.05 million 0.71 $202.73 million $0.80 17.11

Huntsman Corporation has higher revenue and earnings than Rayonier Advanced Materials. Huntsman Corporation is trading at a lower price-to-earnings ratio than Rayonier Advanced Materials, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Huntsman Corporation and Rayonier Advanced Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Huntsman Corporation 4.33% 30.04% 5.34%
Rayonier Advanced Materials 5.71% 24.17% 3.63%

Huntsman Corporation Company Profile

Huntsman Corporation is a manufacturer of differentiated organic chemical products and of inorganic chemical products. The Company operates all of its businesses through its subsidiary, Huntsman International LLC (Huntsman International). The Company operates through five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments and Additives. Its Polyurethanes, Performance Products, Advanced Materials and Textile Effects segments produce differentiated organic chemical products and its Pigments and Additives segment produces inorganic chemical products. The Company’s products are used in a range of applications, including those in the adhesives, aerospace, automotive, construction products, personal care and hygiene, durable and non-durable consumer products, digital inks, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries.

Rayonier Advanced Materials Company Profile

Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company’s product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company’s products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company’s production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.

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