Eastman Chemical (NYSE: EMN) and Olin (NYSE:OLN) are both mid-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.
Eastman Chemical pays an annual dividend of $2.24 per share and has a dividend yield of 2.4%. Olin pays an annual dividend of $0.80 per share and has a dividend yield of 2.3%. Eastman Chemical pays out 32.5% of its earnings in the form of a dividend. Olin pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eastman Chemical has raised its dividend for 5 consecutive years. Eastman Chemical is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Eastman Chemical and Olin’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Eastman Chemical has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Olin has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500.
Insider and Institutional Ownership
82.5% of Eastman Chemical shares are owned by institutional investors. Comparatively, 89.7% of Olin shares are owned by institutional investors. 1.1% of Eastman Chemical shares are owned by company insiders. Comparatively, 2.9% of Olin shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Eastman Chemical and Olin’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Eastman Chemical||$9.01 billion||1.48||$854.00 million||$6.89||13.49|
|Olin||$5.55 billion||1.05||-$3.90 million||$0.45||77.67|
Eastman Chemical has higher revenue and earnings than Olin. Eastman Chemical is trading at a lower price-to-earnings ratio than Olin, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations and price targets for Eastman Chemical and Olin, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Eastman Chemical presently has a consensus price target of $96.69, suggesting a potential upside of 3.99%. Olin has a consensus price target of $39.14, suggesting a potential upside of 12.00%. Given Olin’s stronger consensus rating and higher possible upside, analysts clearly believe Olin is more favorable than Eastman Chemical.
Eastman Chemical beats Olin on 11 of the 17 factors compared between the two stocks.
Eastman Chemical Company Profile
Eastman Chemical Company (Eastman) is an advanced materials and specialty additives company. The Company’s segments include Additives & Functional Products (AFP), Advanced Materials (AM), Chemical Intermediates (CI), and Fibers. In the AFP segment, it manufactures chemicals for products in the coatings, tires, consumables, building and construction, industrial applications, including solar energy markets, animal nutrition, care chemicals, crop protection, and energy markets. In the AM segment, it produces and markets its polymers, films, and plastics with differentiated performance properties for end uses in transportation, consumables, building and construction, durable goods, and health and wellness products. The CI segment leverages large scale and vertical integration from the cellulose and acetyl, olefins, and alkylamines streams to support its specialty operating segments. Its product lines in Fibers segment include Acetate Tow, Acetate Yarn and Acetyl Chemical Products.
Olin Company Profile
Olin Corporation is a manufacturer and distributor of chemical products, and ammunition. The Company operates through three segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, trichloroethylene and vinylidene chloride, hydrochloric acid, hydrogen, bleach products and potassium hydroxide. The Epoxy segment produces and sells a range of epoxy materials, including allyl chloride, epichlorohydrin, liquid epoxy resins and downstream products, such as converted epoxy resins and additives. The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
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