Financial Review: Shin-Etsu Chemical (OTCMKTS:SHECY) versus Yara International ASA (OTCMKTS:YARIY)

Yara International ASA (OTCMKTS:YARIY) and Shin-Etsu Chemical (OTCMKTS:SHECY) are both large-cap materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Insider & Institutional Ownership

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

Profitability

This table compares Yara International ASA and Shin-Etsu Chemical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yara International ASA	9.11%	16.77%	8.53%
Shin-Etsu Chemical	18.39%	10.49%	8.62%

Dividends

Yara International ASA pays an annual dividend of $0.84 per share and has a dividend yield of 3.5%. Shin-Etsu Chemical pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Yara International ASA pays out 27.9% of its earnings in the form of a dividend. Shin-Etsu Chemical pays out 24.1% 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Yara International ASA and Shin-Etsu Chemical, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yara International ASA	1	4	0	2	2.43
Shin-Etsu Chemical	0	1	0	0	2.00

Risk & Volatility

Yara International ASA has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yara International ASA	$15.71 billion	0.78	$1.37 billion	$3.01	7.96
Shin-Etsu Chemical	$17.10 billion	4.30	$3.15 billion	$0.83	22.30

Shin-Etsu Chemical has higher revenue and earnings than Yara International ASA. Yara International ASA 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.

Summary

Shin-Etsu Chemical beats Yara International ASA on 8 of the 13 factors compared between the two stocks.

About Yara International ASA

Yara International ASA provides crop nutrition and industrial solutions in Norway, European Union, Europe, Africa, Asia, North and Latin America, Australia, and New Zealand. The company offers ammonium- and urea-based fertilizers; compound fertilizers that contain nutrients, such as nitrogen, phosphorus, and potassium; coatings; biostimulants; organic-based fertilizers; green fertilizers are nitrate-based mineral fertilizers, as well as foliar and fertigation solutions; and nitrate, calcium nitrate, micronutrient, and fertigation and urea fertilizers. It also offers digital solutions, such as variable rate application solutions; N-Sensor, a tractor-mounted hardware; N-Tester, a handheld nitrogen measurement tool; YaraFX Insight, an agricultural API; and Atfarm, a digital toolbox for farmer. The company sells its products under YaraBela, YaraMila, YaraLiva, YaraVita, YaraRega, YaraTera, YaraSuna, and YaraVera and brands. Yara International ASA was founded in 1905 and is headquartered in Oslo, Norway.

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.