Air Products and Chemicals (NYSE:APD) & Albemarle (NYSE:ALB) Critical Comparison

Air Products and Chemicals (NYSE:APD) and Albemarle (NYSE:ALB) are both large-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Dividends

Air Products and Chemicals pays an annual dividend of $7.24 per share and has a dividend yield of 2.6%. Albemarle pays an annual dividend of $1.62 per share and has a dividend yield of 0.9%. Air Products and Chemicals pays out 76.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Albemarle pays out -47.5% of its earnings in the form of a dividend. Air Products and Chemicals has increased its dividend for 43 consecutive years and Albemarle has increased its dividend for 30 consecutive years. Air Products and Chemicals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Air Products and Chemicals and Albemarle”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Air Products and Chemicals	$12.04 billion	5.21	-$394.50 million	$9.45	29.81
Albemarle	$5.14 billion	3.91	-$510.63 million	($3.41)	-50.03

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

Insider and Institutional Ownership

81.7% of Air Products and Chemicals shares are owned by institutional investors. Comparatively, 92.9% of Albemarle shares are owned by institutional investors. 1.9% of Air Products and Chemicals shares are owned by insiders. Comparatively, 0.4% of Albemarle shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Air Products and Chemicals and Albemarle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Air Products and Chemicals	16.91%	16.11%	6.92%
Albemarle	-5.00%	5.22%	2.51%

Volatility & Risk

Air Products and Chemicals has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Albemarle has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Air Products and Chemicals and Albemarle, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air Products and Chemicals	0	6	10	1	2.71
Albemarle	1	11	14	1	2.56

Air Products and Chemicals presently has a consensus target price of $323.12, indicating a potential upside of 14.71%. Albemarle has a consensus target price of $203.04, indicating a potential upside of 19.02%. Given Albemarle’s higher probable upside, analysts plainly believe Albemarle is more favorable than Air Products and Chemicals.

Summary

Air Products and Chemicals beats Albemarle on 12 of the 17 factors compared between the two stocks.

About Air Products and Chemicals

Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. The company produces atmospheric gases, including oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas; and specialty gases for customers in various industries, including refining, chemical, manufacturing, electronics, energy production, medical, food, and metals. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.

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.