Trinseo (NYSE:TSE) versus Celanese (NYSE:CE) Critical Analysis

Trinseo (NYSE:TSE) and Celanese (NYSE:CE) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Volatility & Risk

Trinseo has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500. Comparatively, Celanese has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Dividends

Trinseo pays an annual dividend of $0.04 per share and has a dividend yield of 17.4%. Celanese pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Trinseo pays out -0.3% of its earnings in the form of a dividend. Celanese pays out -1.2% 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. Trinseo has increased its dividend for 1 consecutive years. Trinseo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Trinseo and Celanese, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinseo	1	2	0	0	1.67
Celanese	1	9	9	0	2.42

Trinseo currently has a consensus price target of $1.00, indicating a potential upside of 334.78%. Celanese has a consensus price target of $67.35, indicating a potential upside of 17.75%. Given Trinseo’s higher probable upside, analysts plainly believe Trinseo is more favorable than Celanese.

Valuation and Earnings

This table compares Trinseo and Celanese”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinseo	$3.13 billion	0.00	-$348.50 million	($11.55)	-0.02
Celanese	$9.49 billion	0.66	-$1.17 billion	($10.01)	-5.71

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

Profitability

This table compares Trinseo and Celanese’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trinseo	-13.15%	N/A	-11.72%
Celanese	-11.54%	9.92%	2.12%

Institutional and Insider Ownership

82.7% of Trinseo shares are owned by institutional investors. Comparatively, 98.9% of Celanese shares are owned by institutional investors. 4.5% of Trinseo shares are owned by insiders. Comparatively, 0.3% of Celanese shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Celanese beats Trinseo on 10 of the 17 factors compared between the two stocks.

About Trinseo

Trinseo PLC operates as a specialty material solutions provider in the United States, Europe, the Asia-Pacific, and internationally. It operates through five segments: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics. The Engineered Materials segment offers rigid thermoplastic compounds and blends, soft thermoplastic, continuous cast, cell cast, activated methyl methacrylates (MMA), PMMA resins, and extruded PMMA sheets and resins for consumer electronics, medical, footwear, automotive, and building and construction applications under the EMERGE, CALIBRE, PLEXIGLAS, ALTUGLAS, ACRYSPA, AVONITE, STUDIO, MEGOL, APILON, APIGO, and APINAT brands. The Latex Binders segment provides styrene-butadiene latex, and other latex polymers and binders primarily for coated paper and packaging board, carpet, and artificial turf backings, as well as the adhesive, building and construction, and technical textile paper market. The Plastics Solutions segment offers acrylonitrile-butadiene-styrene, styrene-acrylonitrile, polycarbonate, and compounds and blends for automotive and other applications under the MAGNUM brand. The Polystyrene segment provides general purpose polystyrenes and high impact polystyrene for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials under the STYRON brand. The Americas Styrenics segment provides styrene and polystyrene for appliances, food packaging, food service disposables, consumer electronics, and building and construction materials applications. Trinseo PLC was incorporated in 2015 and is headquartered in Wayne, Pennsylvania.

About Celanese

Celanese Corporation, a chemical and specialty materials company, manufactures and sells high performance engineered polymers in the United States and internationally. It operates through Engineered Materials and Acetyl Chain. The Engineered Materials segment develops, produces, and supplies specialty polymers for automotive and medical applications, as well as for use in industrial products and consumer electronics. The Acetyl Chain segment produces and supplies acetyl products, including acetic acid, vinyl acetate monomers, acetic anhydride, and acetate esters that are used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals; and organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. It also offers vinyl acetate-based emulsions for use in paints and coatings, adhesives, construction, glass fiber, textiles, and paper applications; and ethylene vinyl acetate resins and compounds, as well as low-density polyethylene for use in flexible packaging films, lamination film products, hot melt adhesives, automotive parts, and carpeting applications. In addition, it provides redispersible powders (RDP) for use in construction applications, including flooring, plasters, insulation, tiling, and waterproofing. Celanese Corporation was founded in 1918 and is headquartered in Irving, Texas.