LyondellBasell Industries (NYSE: LYB) and Koppers (NYSE:KOP) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Volatility and Risk

LyondellBasell Industries has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Koppers has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Institutional and Insider Ownership

74.3% of LyondellBasell Industries shares are held by institutional investors. Comparatively, 89.3% of Koppers shares are held by institutional investors. 0.1% of LyondellBasell Industries shares are held by company insiders. Comparatively, 3.9% of Koppers shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
LyondellBasell Industries 11.32% 58.13% 16.10%
Koppers 3.54% 119.06% 7.05%

Dividends

LyondellBasell Industries pays an annual dividend of $3.60 per share and has a dividend yield of 3.4%. Koppers does not pay a dividend. LyondellBasell Industries pays out 38.6% of its earnings in the form of a dividend. LyondellBasell Industries has increased its dividend for 5 consecutive years and Koppers has increased its dividend for 5 consecutive years.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LyondellBasell Industries 1 7 7 0 2.40
Koppers 0 1 3 0 2.75

LyondellBasell Industries currently has a consensus price target of $99.64, indicating a potential downside of 7.00%. Koppers has a consensus price target of $45.75, indicating a potential downside of 5.77%. Given Koppers’ stronger consensus rating and higher probable upside, analysts clearly believe Koppers is more favorable than LyondellBasell Industries.

Earnings & Valuation

This table compares LyondellBasell Industries and Koppers’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LyondellBasell Industries $29.18 billion 1.45 $3.84 billion $9.33 11.48
Koppers $1.42 billion 0.71 $29.30 million $2.31 21.02

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

Summary

LyondellBasell Industries beats Koppers on 9 of the 16 factors compared between the two stocks.

About LyondellBasell Industries

LyondellBasell Industries N.V. is a chemical company. The Company operates in five segments: Olefins and Polyolefins-Americas (O&P-Americas), Olefins and Polyolefins-Europe, Asia, International (O&P-EAI), Intermediates and Derivatives (I&D), Refining and Technology. The O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene. The O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene. The I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer (SM), acetyls and ethylene oxides. The primary product of the Refining segment is refined products made from sulfur crude oil and other crude oils of various types and sources available on the United States Gulf Coast. The Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.

About Koppers

Koppers Holdings Inc. is a global integrated provider of treated wood products, wood treatment chemicals and carbon compounds. The Company operates through three segments: Railroad and Utility Products and Services (RUPS), Carbon Materials and Chemicals (CMC) and Performance Chemicals (PC). The RUPS business sells treated and untreated wood products, rail joint bars and services primarily to the railroad markets. The primary products supplied by PC business are copper-based wood preservatives, including micronized copper quaternary and micronized copper azole (MicroPro), micronized pigments (MicroShades) and chromated copper arsenate. Through CMC business, the Company processes coal tar into a range of products, including carbon pitch, creosote and carbon black feedstock. Its products and services are used in a range of markets, including the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber and construction industries.

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