Comparing Shin-Etsu Chemical (OTCMKTS:SHECY) & LyondellBasell Industries (NYSE:LYB)

Shin-Etsu Chemical (OTCMKTS:SHECY) and LyondellBasell Industries (NYSE:LYB) are both large-cap basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Analyst Ratings

This is a summary of recent recommendations and price targets for Shin-Etsu Chemical and LyondellBasell Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shin-Etsu Chemical	0	1	0	0	2.00
LyondellBasell Industries	5	16	2	0	1.87

LyondellBasell Industries has a consensus price target of $52.42, suggesting a potential upside of 2.91%. Given LyondellBasell Industries’ higher possible upside, analysts clearly believe LyondellBasell Industries is more favorable than Shin-Etsu Chemical.

Profitability

This table compares Shin-Etsu Chemical and LyondellBasell Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shin-Etsu Chemical	19.32%	10.77%	9.06%
LyondellBasell Industries	-3.70%	7.50%	2.53%

Institutional and Insider Ownership

0.0% of Shin-Etsu Chemical shares are held by institutional investors. Comparatively, 71.2% of LyondellBasell Industries shares are held by institutional investors. 0.1% of LyondellBasell Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.3%. LyondellBasell Industries pays an annual dividend of $5.48 per share and has a dividend yield of 10.8%. Shin-Etsu Chemical pays out 26.4% of its earnings in the form of a dividend. LyondellBasell Industries pays out -146.1% 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. LyondellBasell Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shin-Etsu Chemical	$16.82 billion	4.23	$3.56 billion	$0.87	20.59
LyondellBasell Industries	$40.30 billion	0.41	$1.37 billion	($3.75)	-13.58

Shin-Etsu Chemical has higher earnings, but lower revenue than LyondellBasell Industries. LyondellBasell Industries 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.

Risk and Volatility

Shin-Etsu Chemical has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, LyondellBasell Industries has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Summary

Shin-Etsu Chemical beats LyondellBasell Industries on 9 of the 17 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 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.