Toray Industries (OTCMKTS:TRYIY) and Celanese (NYSE:CE) Financial Analysis

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

Volatility & Risk

Toray Industries has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Celanese has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Institutional and Insider Ownership

98.9% of Celanese shares are held by institutional investors. 0.3% of Celanese shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Toray Industries and Celanese’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toray Industries	3.06%	4.22%	2.30%
Celanese	-11.54%	9.92%	2.12%

Dividends

Toray Industries pays an annual dividend of $0.15 per share and has a dividend yield of 1.1%. Celanese pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Toray Industries pays out 21.4% of its earnings in the form of a dividend. Celanese pays out -1.2% 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 Ratings

This is a summary of current recommendations and price targets for Toray Industries and Celanese, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toray Industries	0	2	0	1	2.67
Celanese	1	7	10	0	2.50

Celanese has a consensus target price of $65.69, suggesting a potential upside of 37.94%. Given Celanese’s higher probable upside, analysts clearly believe Celanese is more favorable than Toray Industries.

Valuation and Earnings

This table compares Toray Industries and Celanese”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toray Industries	$17.17 billion	0.61	$524.84 million	$0.70	20.01
Celanese	$9.54 billion	0.55	-$1.17 billion	($10.01)	-4.76

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

Summary

Toray Industries beats Celanese on 10 of the 17 factors compared between the two stocks.

About Toray Industries

Toray Industries, Inc., together with its subsidiaries, manufactures, processes, and sells fibers and textiles, performance chemicals, carbon fiber composite materials, environment and engineering products, and life science products in Japan, China, North America, Europe, and internationally. The company offers filament yarns, staple fibers, and spun yarns, as well as woven and knitted fabrics of nylon, polyester, acrylics, and others; non-woven fabrics; ultra-fine fibers; and apparel products. It also provides nylon, ABS, PBT, PPS, and other resins and molded products; polyolefin foam products; polyester, polyethylene, polypropylene, and other films; processed film products; raw materials for synthetic fibers and other plastics; fine chemicals; electronic and information materials; and graphic materials. In addition, the company offers carbon fibers, carbon fiber composite materials, and molded products; analysis, physical evaluation, research, and other services; and pharmaceuticals, medical devices, etc. Further, it provides engineering services; condominiums; industrial equipment and machinery; IT-related equipment; water treatment membranes and related equipment; and materials for housing, building, and civil engineering applications. The company was formerly known as Toyo Rayon Co., Ltd. and changed its name to Toray Industries, Inc. in 1970. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

About Celanese

Celanese Corporation, a chemical and specialty materials company, manufactures and sells high performance engineered polymers in the United States and internationally. It operates through Engineered Materials and Acetyl Chain. The Engineered Materials segment develops, produces, and supplies specialty polymers for automotive and medical applications, as well as for use in industrial products and consumer electronics. The Acetyl Chain segment produces and supplies acetyl products, including acetic acid, vinyl acetate monomers, acetic anhydride, and acetate esters that are used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals; and organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. It also offers vinyl acetate-based emulsions for use in paints and coatings, adhesives, construction, glass fiber, textiles, and paper applications; and ethylene vinyl acetate resins and compounds, as well as low-density polyethylene for use in flexible packaging films, lamination film products, hot melt adhesives, automotive parts, and carpeting applications. In addition, it provides redispersible powders (RDP) for use in construction applications, including flooring, plasters, insulation, tiling, and waterproofing. Celanese Corporation was founded in 1918 and is headquartered in Irving, Texas.