Albemarle (NYSE:ALB) versus Basf (OTCMKTS:BASFY) Critical Contrast

Albemarle (NYSE:ALB) and Basf (OTCMKTS:BASFY) are both large-cap materials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Volatility and Risk

Albemarle has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Basf has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

92.9% of Albemarle shares are held by institutional investors. Comparatively, 0.0% of Basf shares are held by institutional investors. 0.4% of Albemarle shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Albemarle and Basf, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Albemarle	2	8	16	0	2.54
Basf	1	3	4	1	2.56

Albemarle currently has a consensus price target of $180.74, suggesting a potential upside of 88.16%. Given Albemarle’s higher possible upside, equities research analysts clearly believe Albemarle is more favorable than Basf.

Profitability

This table compares Albemarle and Basf’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Albemarle	3.09%	10.96%	5.39%
Basf	9.40%	5.66%	2.51%

Valuation and Earnings

This table compares Albemarle and Basf”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Albemarle	$5.14 billion	2.20	-$510.63 million	$0.27	355.76
Basf	$67.48 billion	0.78	$1.83 billion	$1.94	7.60

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

Dividends

Albemarle pays an annual dividend of $1.64 per share and has a dividend yield of 1.7%. Basf pays an annual dividend of $0.47 per share and has a dividend yield of 3.2%. Albemarle pays out 607.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Basf pays out 24.2% of its earnings in the form of a dividend. Albemarle has raised its dividend for 30 consecutive years. Basf is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Albemarle beats Basf on 10 of the 18 factors compared between the two stocks.

About Albemarle

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Energy Storage, Specialties and Ketjen. The Energy Storage segment offers lithium compounds, including lithium carbonate, lithium hydroxide, and lithium chloride; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services. The Specialties segment provides bromine-based specialty chemicals, including elemental bromine, alkyl and inorganic bromides, brominated powdered activated carbon, and other bromine fine chemicals; lithium specialties, such as butyllithium and lithium aluminum hydride; develops and manufactures cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications that include airbag initiators. The Ketjen segment offers clean fuels technologies (CFT), which is composed of hydroprocessing catalysts (HPC) together with isomerization and akylation catalysts; fluidized catalytic cracking (FCC) catalysts and additives; and performance catalyst solutions (PCS), which is composed of organometallics and curatives. The company serves the energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection markets. Albemarle Corporation was founded in 1887 and is headquartered in Charlotte, North Carolina.

About Basf

BASF SE operates as a chemical company worldwide. It operates through six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. The Chemicals segment provides petrochemicals and intermediates. The Materials segment offers advanced materials and their precursors for applications and systems comprising isocyanates, polyamides, and inorganic basic products, as well as specialties for plastics and plastics processing industries. The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, resins, additives, electronic materials, and antioxidants for automotive, plastics, paints and coatings, electronics, and energy and resource industries. The Surface Technologies segment provides automotive OEM and refinish coatings, surface treatment, catalysts, battery materials, and precious and base metal services for the automotive and chemical sectors. The Nutrition & Care segment offers ingredients for consumer goods in the areas of nutrition, home, personal care, and technical applications; and serves the food and feed producers, pharmaceutical, cosmetics, detergents, cleaners, and crop protection industries, as well as fast-moving consumer goods sector. The Agricultural Solutions segment provides seeds and seed treatment products; fungicides, herbicides, insecticides, and biological crop protection products; and digital farming solutions. The company engages in engineering and other; rental and leasing; and commodity trading activities. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany.