Analyzing Arkema (OTCMKTS:ARKAY) & Air Products and Chemicals (NYSE:APD)

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

Dividends

Arkema pays an annual dividend of $3.02 per share and has a dividend yield of 5.0%. Air Products and Chemicals pays an annual dividend of $7.16 per share and has a dividend yield of 2.8%. Arkema pays out 145.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Air Products and Chemicals pays out -402.2% of its earnings in the form of a dividend. Air Products and Chemicals has increased its dividend for 50 consecutive years.

Institutional and Insider Ownership

81.7% of Air Products and Chemicals shares are owned by institutional investors. 0.4% of Air Products and Chemicals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Arkema and Air Products and Chemicals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arkema	2	2	1	0	1.80
Air Products and Chemicals	1	4	9	1	2.67

Air Products and Chemicals has a consensus target price of $313.75, suggesting a potential upside of 21.13%. Given Air Products and Chemicals’ stronger consensus rating and higher possible upside, analysts plainly believe Air Products and Chemicals is more favorable than Arkema.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arkema	2.41%	6.36%	3.31%
Air Products and Chemicals	12.86%	15.11%	6.79%

Risk and Volatility

Arkema has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Air Products and Chemicals has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Valuation and Earnings

This table compares Arkema and Air Products and Chemicals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arkema	$10.33 billion	0.45	$383.06 million	$2.08	29.23
Air Products and Chemicals	$12.04 billion	4.79	$3.83 billion	($1.78)	-145.51

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

Summary

Air Products and Chemicals beats Arkema on 15 of the 18 factors compared between the two stocks.

About Arkema

Arkema S.A. manufactures and sells specialty chemicals and advanced materials worldwide. The company operates in three segments: Adhesive Solutions, Advanced Materials and Coating Solutions, and Intermediates. The Adhesive Solutions segment provides solutions for construction, renovation of buildings, DIY, durable goods, and packaging and non-woven applications; and supplies technologies used in building activities for businesses and individuals, including sealants, tiles, flooring adhesives and waterproofing systems, and technologies used in industry, which include automotive, textiles, glazing, flexible and rigid packaging, and hygiene markets. This segment also offers performance polymers, such as specialty polyamides, PVDF, polyimides, fluorospecialties, and polyetherketoneketone; and performance additives which includes molecular sieves, organic peroxides, thiochemicals, and hydrogen peroxide. The Advance Materials and Coating Solutions segment offers coating solutions, including comprising EU/US acrylics and coating resins; coating additives, such as sartomer photocure resins and coatex rheology additives. This segment also provides decorative paints, industrial coatings, and adhesives; and solutions for applications in the paper, superabsorbent, water treatment and oil and gas extraction, and 3D printing and electronics industries. The Intermediates segment provides fluorogases and acrylics; and industrial intermediate chemicals used in construction, refrigeration and air conditioning, automotive, coatings, and water treatment sectors. Arkema S.A. was incorporated in 2003 and is headquartered in Colombes, France.

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.