Financial Analysis: Asahi Kasei (OTCMKTS:AHKSY) vs. Akzo Nobel (OTCMKTS:AKZOY)

Asahi Kasei (OTCMKTS:AHKSY) and Akzo Nobel (OTCMKTS:AKZOY) are both large-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Risk & Volatility

Asahi Kasei has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Akzo Nobel has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Insider and Institutional Ownership

0.4% of Akzo Nobel shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Asahi Kasei pays an annual dividend of $0.33 per share and has a dividend yield of 1.5%. Akzo Nobel pays an annual dividend of $0.99 per share and has a dividend yield of 4.5%. Asahi Kasei pays out 21.4% of its earnings in the form of a dividend. Akzo Nobel pays out 70.7% 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 breakdown of current ratings and target prices for Asahi Kasei and Akzo Nobel, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Asahi Kasei	0	1	0	1	3.00
Akzo Nobel	1	5	1	1	2.25

Profitability

This table compares Asahi Kasei and Akzo Nobel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Asahi Kasei	5.14%	8.69%	4.25%
Akzo Nobel	6.44%	13.96%	4.43%

Valuation and Earnings

This table compares Asahi Kasei and Akzo Nobel”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Asahi Kasei	$20.42 billion	0.74	$1.05 billion	$1.54	14.16
Akzo Nobel	$11.49 billion	0.98	$718.44 million	$1.40	15.61

Asahi Kasei has higher revenue and earnings than Akzo Nobel. Asahi Kasei is trading at a lower price-to-earnings ratio than Akzo Nobel, indicating that it is currently the more affordable of the two stocks.

Summary

Akzo Nobel beats Asahi Kasei on 9 of the 14 factors compared between the two stocks.

About Asahi Kasei

Asahi Kasei Corporation manufactures and sells chemicals. It offers caustic soda, chemical fertilizers, nitric acid, ammonia, acrylonitrile, methyl methacrylate, styrene, adipic acid, hexamethylene diamine, AH salt, propionitrile, sodium cyanide, acetonitrile, methacrylonitrile, cyclohexyl methacrylate, polyethylenes, polyethylenes powder, PMMA resin, polystyrene, polybutadiene rubbers, styrene/butadiene rubbers, clear styrenic copolymer, styrenic thermoplastic elastomer, hydrogenated styrenic elastomers, membranes and systems, functional materials, foams, purging compound, polyisocyanates, polycarbonatediol, aluminum paste, latex, photopolymers and platemaking systems, films, cyclohexanol, cyclohexane, and cyclohexene. The company also offers lithium-ion battery and lead-acid battery separators, plastic optical fibers, artificial suede, nylon 66 filament, polyamide 66, polyacetal, polyphenyene ether, polypropylene compounds, 3D cubic knitted fabric, noise suppression sheets, audio devices, photosensitive polyimide/PBO precursor, latent hardeners, glass fabrics, specialty products, explosion-bonded metal clads, lining fabrics, cupro and stretch fibers, oil-water separators, cellulose nanobeads, and flame-resistant and synthetic fiber; magnetic, current, and gas sensors; deodorizing, spunbond, cupro, multifunctional, and heat-press formable thermoplastic nonwoven; and ecorise, biocradle, and bemliese products. It provides bags and containers; cooking products; cleaners; plastic packet cutting products; cyclohexyl methacrylate, bonded anchors, and microcrystalline cellulose; pharmaceuticals and diagnostic reagents, dialyzers, therapeutic apheresis, virus removal filters, defibrillators, AEDs, automated CPRs, fluid resuscitation pumps, wearable defibrillators, temperature management systems, and data solutions; construction materials; and remodeling services, as well as develops homes and apartments. The company was founded in 1922 and is headquartered in Tokyo, Japan.

About Akzo Nobel

Akzo Nobel N.V. engages in the production and sale of paints and coatings worldwide. The company operates through two segments: Decorative Paints and Performance Coatings. It offers decorative paints, including paints, lacquers, and varnishes; and a range of mixing machines and color concepts for the building and renovation industry, as well as specialty coatings. The company also provides performance coatings that protect and enhance ships, cars, aircraft, yachts, architectural components, consumer goods, and oil and gas facilities. It offers its products under AkzoNobel, Alabastine, Alba, Andercol, Apla, Armstead Trade, Astral, Astral Batiment, AwlGrip, Brikol, Dulux, Bruguer, Cetabever, Cetol, Chemcraft, Colourland Paints, CONSOLAN, Coral, Cromadex, Cuprinol, Dynacoat, Flexa, Glitsa, Grip-Gard, Herbol, Hammerite, International, Interlux, Innenweis, Interpon, Inca, Luxol, Levis, Lesonal, Molto, Modern Classikk, Maxilite, Mauvilac, Mason CT, Marshall, Mactra, Nordsjo, Oxirite, Protecto, Procolor, Polyfilla, Polycell, Pinotex, Pintuco, Resicoat, Relest, Sparlack, Sadolin, Sikkens, Sea Hawk, Savana, Salcomix, Trimetal, Titanlux, Taubmans, U-tech, Vpowdertech, Vivechrom, Xylazel, Xyladecor, Wanda, and Zweihorn brands. The company serves to energy, packaging, infrastructure, and shipbuilding and maintenance industries, as well as general industries, such as agricultural and construction equipment, construction-related steel, metal fabrication, pipes, appliances, and transportation. The company was formerly known as Akzo NV and changed its name to Akzo Nobel N.V. in 1994. Akzo Nobel N.V. was founded in 1646 and is headquartered in Amsterdam, the Netherlands.