Orion (NYSE:OEC) versus Methanex (NASDAQ:MEOH) Critical Survey

Methanex (NASDAQ:MEOH) and Orion (NYSE:OEC) are both materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

73.5% of Methanex shares are owned by institutional investors. Comparatively, 94.3% of Orion shares are owned by institutional investors. 1.0% of Methanex shares are owned by company insiders. Comparatively, 3.1% of Orion shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Methanex and Orion”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Methanex	$3.59 billion	1.50	$79.88 million	$4.54	15.29
Orion	$1.82 billion	0.18	-$70.10 million	($1.73)	-3.34

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

Profitability

This table compares Methanex and Orion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Methanex	7.62%	20.89%	8.15%
Orion	-5.28%	-0.31%	-0.06%

Analyst Ratings

This is a breakdown of current recommendations for Methanex and Orion, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Methanex	0	4	6	1	2.73
Orion	3	2	0	0	1.40

Methanex currently has a consensus target price of $73.11, indicating a potential upside of 5.33%. Orion has a consensus target price of $5.58, indicating a potential downside of 3.24%. Given Methanex’s stronger consensus rating and higher probable upside, analysts plainly believe Methanex is more favorable than Orion.

Dividends

Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 1.1%. Orion pays an annual dividend of $0.08 per share and has a dividend yield of 1.4%. Methanex pays out 16.3% of its earnings in the form of a dividend. Orion pays out -4.6% 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. Methanex has increased its dividend for 4 consecutive years. Orion is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Methanex has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, Orion has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Summary

Methanex beats Orion on 13 of the 18 factors compared between the two stocks.

About Methanex

Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.

About Orion

Orion S.A., together with its subsidiaries, engages in the manufacture and sale of carbon black products. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for batteries, polymers, and coatings. It also provides rubber carbon black products for applications in mechanical rubber goods, as well as in tires under the ECORAX brand name; and acetylene-based conductive additives for lithium-ion batteries and other applications. It operates in the United States, Brazil, rest of the Americas, Germany, South Africa, Italy, Spain, Turkey, France, Rest of EMEA, China, the Republic of Korea, and rest of Asia. The company was formerly known as Orion Engineered Carbons S.A. and changed its name to Orion S.A. in June 2023. Orion S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.