Contrasting Methanex (NASDAQ:MEOH) & Orion (NYSE:OEC)

Orion (NYSE:OEC) and Methanex (NASDAQ:MEOH) are both materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Insider and Institutional Ownership

94.3% of Orion shares are owned by institutional investors. Comparatively, 73.5% of Methanex shares are owned by institutional investors. 3.1% of Orion shares are owned by insiders. Comparatively, 1.0% of Methanex shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Orion 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 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Orion	-5.28%	-0.31%	-0.06%
Methanex	7.62%	20.89%	8.15%

Valuation and Earnings

This table compares Orion and Methanex”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion	$1.82 billion	0.18	-$70.10 million	($1.73)	-3.34
Methanex	$3.59 billion	1.50	$79.88 million	$4.54	15.29

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

Analyst Recommendations

This is a summary of current ratings for Orion and Methanex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion	3	2	0	0	1.40
Methanex	0	4	6	1	2.73

Orion currently has a consensus target price of $5.58, indicating a potential downside of 3.24%. Methanex has a consensus target price of $73.11, indicating a potential upside of 5.33%. Given Methanex’s stronger consensus rating and higher probable upside, analysts clearly believe Methanex is more favorable than Orion.

Dividends

Orion pays an annual dividend of $0.08 per share and has a dividend yield of 1.4%. Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 1.1%. Orion pays out -4.6% of its earnings in the form of a dividend. Methanex pays out 16.3% 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. Methanex has raised its dividend for 4 consecutive years. Orion is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

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

About Orion

Orion S.A., together with its subsidiaries, engages in the manufacture and sale of carbon black products. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for batteries, polymers, and coatings. It also provides rubber carbon black products for applications in mechanical rubber goods, as well as in tires under the ECORAX brand name; and acetylene-based conductive additives for lithium-ion batteries and other applications. It operates in the United States, Brazil, rest of the Americas, Germany, South Africa, Italy, Spain, Turkey, France, Rest of EMEA, China, the Republic of Korea, and rest of Asia. The company was formerly known as Orion Engineered Carbons S.A. and changed its name to Orion S.A. in June 2023. Orion S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.

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.