Braskem (NYSE:BAK) & Clariant (OTCMKTS:CLZNY) Financial Analysis

Clariant (OTCMKTS:CLZNY) and Braskem (NYSE:BAK) are both materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Profitability

This table compares Clariant and Braskem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clariant	N/A	N/A	N/A
Braskem	-7.28%	-67.75%	9.94%

Analyst Recommendations

This is a summary of current ratings for Clariant and Braskem, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clariant	1	4	2	2	2.56
Braskem	5	3	0	0	1.38

Braskem has a consensus target price of $3.40, indicating a potential upside of 105.44%. Given Braskem’s higher possible upside, analysts plainly believe Braskem is more favorable than Clariant.

Valuation and Earnings

This table compares Clariant and Braskem”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clariant	N/A	N/A	N/A	$0.47	27.88
Braskem	$70.60 billion	0.01	-$1.77 billion	($2.43)	-0.68

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

Institutional & Insider Ownership

0.2% of Clariant shares are owned by institutional investors. 0.0% of Braskem shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Clariant pays an annual dividend of $1.32 per share and has a dividend yield of 10.2%. Braskem pays an annual dividend of $0.63 per share and has a dividend yield of 38.1%. Clariant pays out 283.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Braskem pays out -25.9% of its earnings in the form of a dividend. Braskem is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Clariant beats Braskem on 8 of the 14 factors compared between the two stocks.

About Clariant

Clariant AG engages in the development, manufacture, distribution, and sale of specialty chemicals worldwide. The Care Chemicals segment offers specialty chemicals and application solutions for various applications in automotive fluids, aviation, construction chemicals, crop solutions, health care, home care, industrial lubricants, paints and coatings, personal care, and special solvents. The Catalysis segment provides catalyst products for use as ammonia cracking, ammonia, custom catalysts, ethylene and derivatives, fischer-tropsch, fuel cell, fuel upgrading, gas processing, hydrogen, hydrogenation, liquid hydrogen carrier, low-carbon ammonia, low-carbon methanol, methanol, methanol-to-propylene, off-gas treatment, olefins purification, on-purpose propylene, oxidation, polypropylene, refinery stream purification, styrene, zeolite powders, biocatalysis, cellulosic ethanol, cellulosic sugars, low-carbon advanced biofuels, and residue-derived biochemical intermediates. The Adsorbents and Additives segment provides chemicals for oil, gas, mining, and refinery industries; services for oil and gas industries; emulsifiers for explosives, as well as cold-flow additive applications for middle distillates in refineries; mineral-based specialty products for bio- and renewable fuel purification, BTX catalysts, cargo and device protection, cat litter, chemical recycling, civil engineering, clay specialties, detergent additives, edible oil purification, feed additives, foundry additives, kerosene and jet fuel purification, paper additives, PVC stabilizers, and wastewater treatment applications; and flame retardants, performance additives, and advanced surface solutions for use in acid scavengers, antioxidiants, antistatic agents, halogen-free flame retardants, heat stabilizers, hot-melt adhesives, light stabilizers, lubricants, processing aids, processing stabilizers, release agents, slip control agents, and surface modifiers. The company was founded in 1886 and is headquartered in Muttenz, Switzerland.

About Braskem

Braskem S.A., together with its subsidiaries, produces and sells thermoplastic resins. The company operates through three segments: Brazil, United States and Europe, and Mexico. The Brazil segment produces and sells olefins, including ethylene, polymer and chemical grade propylene, butadiene, and butene-1; benzene, toluene, and xylenes products; fuels, such as automotive gasoline, liquefied petroleum gas, ethyl tertiary-butyl ether, and methyl tertiary-butyl ether; intermediates, such as cumene; aliphatics, aromatics, and hydrogenated solvents; and specialties comprising isoprene, dicyclopentadiene, piperylene, nonene, tetramer, polyisobutylene, and hydrocarbon resins. This segment also produces and sells polyethylene (PE) and polypropylene (PP); supplies electricity and other inputs to second-generation producers; produces and sells of PE, including the production of green PE from renewable resources; and produces and sells polyvinyl chloride and caustic soda. The United States and Europe segment produces and sells PP in the United States and Germany. The Mexico segment produces and sells ethylene, high-density PE, and low-density PE in Mexico. It also manufactures, sells, imports, and exports chemicals, petrochemicals, and fules; produces, supplies, and sells utilities, such as steam, water, compressed air, and industrial gases; and provides industrial services. The company was formerly known as Copene Petroquímica do Nordeste S.A. and changed its name to Braskem S.A. in 2002. Braskem S.A. was founded in 1972 and is headquartered in São Paulo, Brazil.