PolyOne Corporation (NYSE: POL) and Dow Chemical Company (The) (NYSE:DOW) are both mid-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, dividends, risk, valuation, earnings and institutional ownership.
Institutional and Insider Ownership
97.0% of PolyOne Corporation shares are owned by institutional investors. Comparatively, 68.4% of Dow Chemical Company (The) shares are owned by institutional investors. 1.6% of PolyOne Corporation shares are owned by company insiders. Comparatively, 0.9% of Dow Chemical Company (The) shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares PolyOne Corporation and Dow Chemical Company (The)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Dow Chemical Company (The)||5.83%||17.08%||5.89%|
Volatility & Risk
PolyOne Corporation has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500. Comparatively, Dow Chemical Company (The) has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.
Earnings & Valuation
This table compares PolyOne Corporation and Dow Chemical Company (The)’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PolyOne Corporation||$3.45 billion||0.86||$418.80 million||($0.73)||-49.90|
|Dow Chemical Company (The)||$52.57 billion||1.48||$9.27 billion||$2.39||26.53|
Dow Chemical Company (The) has higher revenue and earnings than PolyOne Corporation. PolyOne Corporation is trading at a lower price-to-earnings ratio than Dow Chemical Company (The), indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for PolyOne Corporation and Dow Chemical Company (The), as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Dow Chemical Company (The)||0||3||6||0||2.67|
PolyOne Corporation currently has a consensus price target of $40.25, indicating a potential upside of 10.49%. Dow Chemical Company (The) has a consensus price target of $71.86, indicating a potential upside of 13.34%. Given Dow Chemical Company (The)’s higher probable upside, analysts clearly believe Dow Chemical Company (The) is more favorable than PolyOne Corporation.
PolyOne Corporation pays an annual dividend of $0.54 per share and has a dividend yield of 1.5%. Dow Chemical Company (The) pays an annual dividend of $1.84 per share and has a dividend yield of 2.9%. PolyOne Corporation pays out -74.0% of its earnings in the form of a dividend. Dow Chemical Company (The) pays out 77.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PolyOne Corporation has raised its dividend for 5 consecutive years and Dow Chemical Company (The) has raised its dividend for 6 consecutive years. Dow Chemical Company (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Dow Chemical Company (The) beats PolyOne Corporation on 9 of the 16 factors compared between the two stocks.
About PolyOne Corporation
PolyOne Corporation (PolyOne) provides specialized polymer materials, services and solutions. The Company’s segments include Color, Additives and Inks; Specialty Engineered Materials; Performance Products and Solutions, and PolyOne Distribution. The Color, Additives and Inks segment provides custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets. The Specialty Engineered Materials segment provides specialty polymer formulations, services and solutions for designers, assemblers and processors of thermoplastic materials. The Performance Products and Solutions segment consists of the Geon Performance Materials and Producer Services business units. As of December 31, 2016, the PolyOne Distribution segment distributed more than 4,000 grades of engineering and commodity grade resins.
About Dow Chemical Company (The)
The Dow Chemical Company manufactures and supplies products used primarily as raw materials in the manufacture of customer products and services. The Company’s segments include Agricultural Sciences, which is engaged in providing crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and healthy oils; Consumer Solutions, which consists of Consumer Care, Dow Automotive Systems, Dow Electronic Materials and Consumer Solutions-Silicones businesses; Infrastructure Solutions, which consists of Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions, Performance Monomers and Infrastructure Solutions-Silicones businesses; Performance Materials & Chemicals, which consists of Chlor-Alkali and Vinyl, Industrial Solutions and Polyurethanes businesses, and Performance Plastics, which consists of Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy and Hydrocarbons businesses.
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