Dow Chemical (NYSE: DWDP) and Eastman Chemical (NYSE:EMN) are both large-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Volatility and Risk
Dow Chemical has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500. Comparatively, Eastman Chemical has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.
This table compares Dow Chemical and Eastman Chemical’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Dow Chemical||$62.48 billion||2.48||$1.46 billion||$3.40||19.55|
|Eastman Chemical||$9.55 billion||1.59||$1.38 billion||$7.61||13.96|
Dow Chemical has higher revenue and earnings than Eastman Chemical. Eastman Chemical is trading at a lower price-to-earnings ratio than Dow Chemical, indicating that it is currently the more affordable of the two stocks.
Dow Chemical pays an annual dividend of $1.52 per share and has a dividend yield of 2.3%. Eastman Chemical pays an annual dividend of $2.24 per share and has a dividend yield of 2.1%. Dow Chemical pays out 44.7% of its earnings in the form of a dividend. Eastman Chemical pays out 29.4% 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. Eastman Chemical has increased its dividend for 6 consecutive years.
This table compares Dow Chemical and Eastman Chemical’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
70.5% of Dow Chemical shares are held by institutional investors. Comparatively, 85.5% of Eastman Chemical shares are held by institutional investors. 0.4% of Dow Chemical shares are held by insiders. Comparatively, 1.1% of Eastman Chemical shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a summary of recent ratings and price targets for Dow Chemical and Eastman Chemical, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Dow Chemical presently has a consensus target price of $81.05, suggesting a potential upside of 21.93%. Eastman Chemical has a consensus target price of $102.14, suggesting a potential downside of 3.83%. Given Dow Chemical’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Dow Chemical is more favorable than Eastman Chemical.
Dow Chemical beats Eastman Chemical on 9 of the 17 factors compared between the two stocks.
About Dow Chemical
DowDuPont Inc., through its subsidiaries, engages in agriculture, materials science, and specialty products businesses worldwide. The company's Agriculture segment develops and sells hybrid corn seed and soybean seed varieties; canola, cotton, sunflower, sorghum, wheat, and rice seeds; silage inoculants; and weed control, disease control, and insect control products. Its Performance Materials & Coatings segment manufactures and sells architectural paints and coatings, and industrial coatings; performance monomers and silicones; and standalone silicone and acrylic-based materials. The company's Industrial Intermediates & Infrastructure segment offers cellulose ethers, redispersible latex powders, silicones, and acrylic emulsions; energy solutions; propylene oxide and propylene glycol, polyether polyols and aromatic isocyanates, and formulated polyurethane systems; and caustic soda, and ethylene dichloride and vinyl chloride monomer products. Its Packaging & Specialty Plastics segment provides ethylene, and propylene and aromatic products; and polyolefin elastomers and ethylene propylene diene monomer elastomers. The company's Electronics & Imaging segment offers materials and systems for mobile devices, television monitors, personal computers, and electronics. Its Nutrition & Biosciences segment provides specialty food ingredients, as well as cellulosic- and alginates-based pharma excipients; and enzymes, biomaterials, biocides, and antimicrobial solutions and process technology. The company's Transportation & Advanced Polymers segment offers engineering resins, adhesives, lubricants, and parts for transportation, electronics, medical, industrial, and consumer end-markets. Its Safety & Construction segment provides engineered products and integrated systems for construction, worker safety, energy, oil and gas, transportation, medical device, and water purification and separation industries. The company was founded in 1897 and is headquartered in Midland, Michigan.
About Eastman Chemical
Eastman Chemical Company manufactures and sells materials, specialty additives, chemicals, and fibers in the United States and internationally. The company's Additives & Functional Products segment offers specialty coalescents, specialty and commodity solvents, paint additives, and specialty polymers; hydrocarbon and rosin resins; insoluble sulfur and antidegradant rubber additives; performance resins and amine derivative-based building blocks; heat transfer and aviation fluids; formic acid-based solutions; and metam-based soil fumigants, thiram and ziram based fungicides, and plant growth regulators. Its products are used in transportation, consumables, building and construction, industrial applications, animal nutrition, care chemicals, crop protection, and energy markets. Its Advanced Materials segment provides copolyesters, cellulose esters, polyvinyl butyral (PVB) sheets, specialty (PVB) intermediates, and window film and protective film, and aftermarket applied film products for value-added end uses in transportation, consumables, building and construction, durable goods, and health and wellness markets. The company's Chemical Intermediates segment offers Olefin derivatives, acetyl derivatives, ethylene, and commodity solvents; primary non-phthalate and phthala plasticizers, and a range of niche non- phthalate plasticizers; and methylamines and salts higher amines and solvents. Its Fibers segment manufactures and sells cellulose acetate tow for use in filtration media primarily cigarette filters; triacetin, cellulose acetate flake, and acetyl raw materials for other acetate fiber producers; and natural, acetate, and polyester yarn, as well as solution-dyed acetate yarn for use in apparel, home furnishings, and industrial fabrics. The company also offers aviation turbine engine oil; wet-laid nonwovens; and specialty films. Eastman Chemical Company was founded in 1920 and is headquartered in Kingsport, Tennessee.
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