Sumitomo Chemcl (OTCMKTS:SOMMY – Get Free Report) and Shin-Etsu Chemical (OTCMKTS:SHECY – Get Free Report) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, institutional ownership, profitability, risk and dividends.
Earnings & Valuation
This table compares Sumitomo Chemcl and Shin-Etsu Chemical”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sumitomo Chemcl | $17.12 billion | 0.30 | $254.70 million | $1.73 | 8.85 |
| Shin-Etsu Chemical | $16.82 billion | 3.73 | $3.56 billion | $0.87 | 18.17 |
Risk and Volatility
Sumitomo Chemcl has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.
Dividends
Sumitomo Chemcl pays an annual dividend of $0.26 per share and has a dividend yield of 1.7%. Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.5%. Sumitomo Chemcl pays out 15.0% of its earnings in the form of a dividend. Shin-Etsu Chemical pays out 26.4% 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. Sumitomo Chemcl is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Sumitomo Chemcl and Shin-Etsu Chemical’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sumitomo Chemcl | 3.43% | 7.54% | 2.43% |
| Shin-Etsu Chemical | 19.32% | 10.77% | 9.06% |
Analyst Ratings
This is a breakdown of recent ratings and price targets for Sumitomo Chemcl and Shin-Etsu Chemical, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sumitomo Chemcl | 0 | 1 | 0 | 0 | 2.00 |
| Shin-Etsu Chemical | 0 | 1 | 0 | 0 | 2.00 |
Institutional & Insider Ownership
0.0% of Shin-Etsu Chemical shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Shin-Etsu Chemical beats Sumitomo Chemcl on 8 of the 12 factors compared between the two stocks.
About Sumitomo Chemcl
Sumitomo Chemical Company, Limited engages in Chemicals & Plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Essential Chemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; resorcinol for tires, wood adhesives, flame retardants, and ultraviolet ray absorbants; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists and polymer OLED for LC and OLED displays; photoresists and high-purity chemicals for the semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.
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.
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