Head to Head Review: Eastman Chemical (NYSE:EMN) and Sumitomo Chemcl (OTCMKTS:SOMMY)

Eastman Chemical (NYSE:EMN) and Sumitomo Chemcl (OTCMKTS:SOMMY) are both mid-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Earnings & Valuation

This table compares Eastman Chemical and Sumitomo Chemcl”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eastman Chemical	$9.02 billion	0.77	$905.00 million	$5.99	10.23
Sumitomo Chemcl	$17.12 billion	0.27	$254.70 million	$1.73	8.10

Eastman Chemical has higher earnings, but lower revenue than Sumitomo Chemcl. Sumitomo Chemcl is trading at a lower price-to-earnings ratio than Eastman Chemical, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Eastman Chemical has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Sumitomo Chemcl has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Profitability

This table compares Eastman Chemical and Sumitomo Chemcl’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastman Chemical	8.96%	15.24%	5.91%
Sumitomo Chemcl	0.35%	0.80%	0.25%

Dividends

Eastman Chemical pays an annual dividend of $3.32 per share and has a dividend yield of 5.4%. Sumitomo Chemcl pays an annual dividend of $0.28 per share and has a dividend yield of 2.0%. Eastman Chemical pays out 55.4% of its earnings in the form of a dividend. Sumitomo Chemcl pays out 16.2% 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 raised its dividend for 15 consecutive years. Eastman Chemical is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Eastman Chemical and Sumitomo Chemcl, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastman Chemical	0	5	8	0	2.62
Sumitomo Chemcl	0	1	0	0	2.00

Eastman Chemical currently has a consensus target price of $79.33, suggesting a potential upside of 29.53%. Given Eastman Chemical’s stronger consensus rating and higher possible upside, equities analysts clearly believe Eastman Chemical is more favorable than Sumitomo Chemcl.

Insider & Institutional Ownership

83.7% of Eastman Chemical shares are owned by institutional investors. 1.9% of Eastman Chemical shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Eastman Chemical beats Sumitomo Chemcl on 14 of the 17 factors compared between the two stocks.

About Eastman Chemical

Eastman Chemical Company operates as a specialty materials company in the United States, China, and internationally. The company's Additives & Functional Products segment offers amine derivative-based building blocks, intermediates for surfactants, metam-based soil fumigants, and organic acid-based solutions; specialty coalescent and solvents, paint additives, and specialty polymers; and heat transfer and aviation fluids. It serves transportation, personal care, wellness, food, feed, agriculture, building and construction, water treatment, energy, consumables, durables, and electronics markets. Its Advanced Materials segment provides copolyesters, cellulosic biopolymers, cellulose esters, polyvinyl butyral sheets, and window and protective films for value-added end uses in the transportation, durables, electronics, building and construction, medical and pharma, and consumables markets. The company's Chemical Intermediates segment offers olefin and acetyl derivatives, ethylene, and commodity solvents; and primary non-phthalate and phthalate plasticizers, and niche non-phthalate plasticizers for industrial chemicals and processing, building and construction, health and wellness, and food and feed. Its Fibers segment provides cellulose acetate tow, triacetin, cellulose acetate flake, acetic acid, and acetic anhydride for use in filtration media primarily cigarette filters; natural and solution dyed acetate yarns, and staple fiber for use in consumables, and health and wellness markets; and wet-laid nonwoven media, specialty and engineered papers, and cellulose acetate fibers for transportation, industrial, agriculture and mining, and aerospace markets. The company was founded in 1920 and is headquartered in Kingsport, Tennessee.

About Sumitomo Chemcl

Sumitomo Chemical Company, Limited engages in Chemicals & Plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Essential Chemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; resorcinol for tires, wood adhesives, flame retardants, and ultraviolet ray absorbants; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists and polymer OLED for LC and OLED displays; photoresists and high-purity chemicals for the semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.