Methanex (NASDAQ:MEOH) & Mitsubishi Chemical (OTCMKTS:MTLHY) Critical Comparison

Mitsubishi Chemical (OTCMKTS:MTLHY) and Methanex (NASDAQ:MEOH) are both mid-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Earnings and Valuation

This table compares Mitsubishi Chemical and Methanex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mitsubishi Chemical	$28.94 billion	0.24	$297.13 million	$1.02	24.16
Methanex	$3.72 billion	0.71	$163.99 million	$2.98	11.54

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

Volatility and Risk

Mitsubishi Chemical has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Methanex has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi Chemical	0	0	0	0	0.00
Methanex	0	3	4	1	2.75

Methanex has a consensus target price of $44.88, suggesting a potential upside of 30.55%. Given Methanex’s stronger consensus rating and higher possible upside, analysts clearly believe Methanex is more favorable than Mitsubishi Chemical.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mitsubishi Chemical	1.00%	1.89%	0.73%
Methanex	6.00%	12.45%	4.53%

Institutional & Insider Ownership

73.5% of Methanex shares are held by institutional investors. 1.0% of Methanex shares are held 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.

Dividends

Mitsubishi Chemical pays an annual dividend of $0.75 per share and has a dividend yield of 3.0%. Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 2.2%. Mitsubishi Chemical pays out 73.5% of its earnings in the form of a dividend. Methanex pays out 24.8% 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.

Summary

Methanex beats Mitsubishi Chemical on 14 of the 18 factors compared between the two stocks.

About Mitsubishi Chemical

Mitsubishi Chemical Group Corporation provides performance products, chemicals, industrial gases, health care products, and other products in Japan and internationally. It operates in five segments: Specialty Materials, Industrial Gases, Health Care, MMA, and Basic Materials. The Specialty Materials segment offers performance polymers, soarnol, gohsenol, sustainable polymers, and engineering plastics; coating materials, additives, and fines; packaging, industrial and medical, acetyl, and polyester films; engineering shapes and solutions, carbon fiber and composite materials, and fibers; aqua, life, and infrastructure solutions; and semiconductor, electronics, and battery materials. The Industrial Gases segment provides industrial gases. The Health Care segment offers ethical pharmaceuticals. The MMA segment provides methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). The Basic Materials segment offers basic petrochemicals, polyolefins, and basic chemical derivatives, as well as carbon products. The company provides engineering, transportation, and warehousing services. Mitsubishi Chemical Group Corporation was incorporated in 2005 and is headquartered in Tokyo, Japan.

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.