Comparing Kraton (KRA) & Albemarle (ALB)

Kraton (NYSE: KRA) and Albemarle (NYSE:ALB) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for Kraton and Albemarle, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kraton 1 1 2 0 2.25
Albemarle 0 4 19 0 2.83

Kraton currently has a consensus target price of $56.33, suggesting a potential upside of 15.60%. Albemarle has a consensus target price of $125.02, suggesting a potential upside of 31.85%. Given Albemarle’s stronger consensus rating and higher possible upside, analysts plainly believe Albemarle is more favorable than Kraton.

Dividends

Albemarle pays an annual dividend of $1.34 per share and has a dividend yield of 1.4%. Kraton does not pay a dividend. Albemarle pays out 29.2% of its earnings in the form of a dividend. Albemarle has raised its dividend for 14 consecutive years.

Risk & Volatility

Kraton has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Albemarle has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Insider and Institutional Ownership

97.3% of Kraton shares are owned by institutional investors. Comparatively, 86.3% of Albemarle shares are owned by institutional investors. 4.7% of Kraton shares are owned by company insiders. Comparatively, 0.8% of Albemarle shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Kraton and Albemarle’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kraton $1.96 billion 0.79 $97.54 million $2.85 17.10
Albemarle $3.07 billion 3.42 $54.85 million $4.59 20.66

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

Profitability

This table compares Kraton and Albemarle’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kraton 5.65% 18.07% 3.80%
Albemarle 4.27% 13.80% 7.19%

Summary

Albemarle beats Kraton on 11 of the 17 factors compared between the two stocks.

Kraton Company Profile

Kraton Corporation manufactures and sells styrenic block copolymers and other engineered polymers in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Polymer and Chemical. The Polymer segment offers performance products, including styrene-butadiene-styrene and styrene-isoprene-styrene; and specialty polymers, such as hydrogenated styrenic block copolymers, as well as isoprene rubber and isoprene rubber latex for use in medical and personal care products, adhesives, tackifiers, paints, and coatings. The Chemical segment provides pine-based specialty products that include rosin-based tackifiers for packaging and pressure-sensitive adhesive applications; terpene-based tackifiers for bookbinding, hygiene, and pressure-sensitive adhesive applications; alpha-methyl-styrene (AMS) resins for bookbinding and pressure-sensitive adhesive applications; and hot melt polyamides for flexible packaging. It also provides rosin-based binders for the thermoplastic pavement marking submarket; sells tall oil fatty acids for the asphalt paving market; and produces rosin esters and insoluble maleic-based tackifiers, as well as bitumen additives. In addition, this segment offers terpene-based tread enhancement resins and AMS-based tread enhancement additives, as well as distilled tall oil and rosins for enhancing the performance and manufacturing of high performance, winter, and all-season tires. Further, it provides dimer acids, tall oil rosins, and terpene fractions for fuel additive, oilfield chemical, mining fluid, coating, metalworking fluid and lubricant, and other applications. The company sells its products through various channels, including direct sales force, marketing representatives, and distributors under the Kraton and Cariflex brands. The company was formerly known as Kraton Performance Polymers, Inc. and changed its name to Kraton Corporation in September 2016. Kraton Corporation is based in Houston, Texas.

Albemarle Company Profile

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. Its Lithium and Advanced Materials segment offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties, as well as reagents, such as butyllithium and lithium aluminum hydride for applications in lithium batteries for consumer electronics and automobiles, high performance greases, thermoplastic elastomers for car tires, rubber soles, plastic bottles, catalysts for chemical reactions, organic synthesis processes, life science, pharmaceutical, and other markets. It also offers cesium products for the chemical and pharmaceutical markets; zirconium, barium, and titanium products for various pyrotechnical applications; technical services, such as the handling and use of reactive lithium products; and recycling services for lithium-containing by-products. In addition, this segment offers performance catalyst solutions comprising organometallics, polymer catalysts, and curatives for polyolefin polymers, packaging, non-packaging, films, injection molding, alpha-olefins, polyurethanes, epoxies, and engineered resins markets. Its Bromine Specialties segment offers bromine and bromine-based solutions for fire safety, chemical synthesis, mercury control, water purification, beef and poultry processing, and other industrial applications, as well as oil and gas well drilling, and completion fluids applications; and tertiary amines, biocides, disinfectants, and sanitizers. Its Refining Solutions segment offers clean fuels technologies, which is primarily composed of hydroprocessing catalysts; and fluidized catalytic cracking catalysts and additives for refining industry. It serves energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, crop protection, and custom chemistry services markets. The company was founded in 1994 and is headquartered in Charlotte, North Carolina.

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