Financial Analysis: Eastman Chemical (EMN) versus Its Peers

Eastman Chemical (NYSE:EMN) is one of 295 publicly-traded companies in the “Chemicals” industry, but how does it compare to its peers? We will compare Eastman Chemical to related businesses based on the strength of its dividends, profitability, earnings, risk, valuation, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

83.7% of Eastman Chemical shares are owned by institutional investors. Comparatively, 48.0% of shares of all “Chemicals” companies are owned by institutional investors. 2.6% of Eastman Chemical shares are owned by company insiders. Comparatively, 14.1% of shares of all “Chemicals” companies are owned by company insiders. 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.

Analyst Ratings

This is a summary of current recommendations for Eastman Chemical and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastman Chemical	1	9	6	0	2.31
Eastman Chemical Competitors	3239	12180	14102	515	2.40

Eastman Chemical currently has a consensus target price of $74.50, indicating a potential upside of 11.57%. As a group, “Chemicals” companies have a potential upside of 6.38%. Given Eastman Chemical’s higher possible upside, equities analysts plainly believe Eastman Chemical is more favorable than its peers.

Valuation & Earnings

This table compares Eastman Chemical and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Eastman Chemical	$8.75 billion	$474.00 million	11.86
Eastman Chemical Competitors	$7.99 billion	$222.31 million	-3.69

Eastman Chemical has higher revenue and earnings than its peers. Eastman Chemical is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Eastman Chemical pays an annual dividend of $3.36 per share and has a dividend yield of 5.0%. Eastman Chemical pays out 59.7% of its earnings in the form of a dividend. As a group, “Chemicals” companies pay a dividend yield of 3.1% and pay out 108.0% of their earnings in the form of a dividend. Eastman Chemical has raised its dividend for 15 consecutive years. Eastman Chemical is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Risk and Volatility

Eastman Chemical has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Eastman Chemical’s peers have a beta of 1.26, suggesting that their average stock price is 26% more volatile than the S&P 500.

Profitability

This table compares Eastman Chemical and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastman Chemical	4.99%	9.46%	3.78%
Eastman Chemical Competitors	-61.06%	1.32%	-1.40%

Summary

Eastman Chemical beats its peers on 10 of the 15 factors compared.

About Eastman Chemical

Eastman Chemical Company operates as a specialty materials company in the United States, China, and internationally. The company's Additives & Functional Products segment offers amine derivative-based building blocks, intermediates for surfactants, metam-based soil fumigants, and organic acid-based solutions; specialty coalescent and solvents, paint additives, and specialty polymers; and heat transfer and aviation fluids. It serves transportation, personal care, wellness, food, feed, agriculture, building and construction, water treatment, energy, consumables, durables, and electronics markets. Its Advanced Materials segment provides copolyesters, cellulosic biopolymers, cellulose esters, polyvinyl butyral sheets, and window and protective films for value-added end uses in the transportation, durables, electronics, building and construction, medical and pharma, and consumables markets. The company's Chemical Intermediates segment offers olefin and acetyl derivatives, ethylene, and commodity solvents; and primary non-phthalate and phthalate plasticizers, and niche non-phthalate plasticizers for industrial chemicals and processing, building and construction, health and wellness, and food and feed. Its Fibers segment provides cellulose acetate tow, triacetin, cellulose acetate flake, acetic acid, and acetic anhydride for use in filtration media primarily cigarette filters; natural and solution dyed acetate yarns, and staple fiber for use in consumables, and health and wellness markets; and wet-laid nonwoven media, specialty and engineered papers, and cellulose acetate fibers for transportation, industrial, agriculture and mining, and aerospace markets. The company was founded in 1920 and is headquartered in Kingsport, Tennessee.