Head to Head Review: Methanex (NASDAQ:MEOH) and Basf (OTCMKTS:BASFY)

Basf (OTCMKTS:BASFY) and Methanex (NASDAQ:MEOH) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Insider and Institutional Ownership

0.0% of Basf shares are owned by institutional investors. Comparatively, 73.5% of Methanex shares are owned by institutional investors. 1.0% of Methanex shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Basf has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Methanex has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Basf	0.43%	6.88%	3.09%
Methanex	5.97%	9.30%	3.47%

Analyst Recommendations

This is a breakdown of recent recommendations for Basf and Methanex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Basf	2	1	5	0	2.38
Methanex	0	3	8	2	2.92

Methanex has a consensus target price of $46.27, suggesting a potential upside of 23.66%. Given Methanex’s stronger consensus rating and higher possible upside, analysts clearly believe Methanex is more favorable than Basf.

Dividends

Basf pays an annual dividend of $0.44 per share and has a dividend yield of 3.6%. Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 2.0%. Basf pays out 440.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Methanex pays out 25.1% of its earnings in the form of a dividend. Methanex has raised its dividend for 4 consecutive years.

Earnings & Valuation

This table compares Basf and Methanex”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Basf	$70.63 billion	0.62	$1.40 billion	$0.10	123.50
Methanex	$3.57 billion	0.81	$163.99 million	$2.95	12.68

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

Summary

Methanex beats Basf on 13 of the 18 factors compared between the two stocks.

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.

About Methanex

Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.