In a detailed comparison of two mid-cap basic materials companies, Avient Corporation and Methanex Corporation, investors are evaluating which firm presents a more favorable business opportunity. The analysis considers aspects such as valuation strength, institutional ownership, earnings performance, profitability, risk, analyst recommendations, and dividend policies.
Volatility and Risk Assessment
Risk assessment reveals notable differences between the two companies. Avient has a beta of 1.46, indicating its stock price is approximately 46% more volatile than the S&P 500. In contrast, Methanex reports a beta of 0.77, suggesting that its stock price is about 23% less volatile than the benchmark index. This data suggests that Avient may carry a higher risk for investors, while Methanex appears to provide a more stable investment.
Profitability and Earnings Comparison
When examining profitability, the two companies show differing strengths. Avient demonstrates higher earnings, yet it has lower revenue compared to Methanex. According to recent data, Avient’s net margin, return on equity, and return on assets indicate its ability to generate profit effectively, though Methanex’s overall revenue performance remains stronger. This raises questions about Avient’s long-term sustainability given its higher earnings but lower revenue figures.
In terms of valuation, Methanex currently trades at a lower price-to-earnings ratio compared to Avient, making it a more affordable option for potential investors.
Analyst Ratings and Future Potential
Analysts also provide insights into the future potential of both companies. Avient has a consensus target price of $42.50, which represents a potential upside of approximately 34.56%. Meanwhile, Methanex has a consensus target price of $46.55, indicating a potential upside of 16.77%. Given Avient’s higher upside potential, analysts appear to favor this company over Methanex.
Dividends and Payout Ratios
Dividend policies further differentiate the two firms. Avient offers an annual dividend of $1.10 per share, yielding 3.5%. In contrast, Methanex pays an annual dividend of $0.74 per share, with a yield of 1.9%. Notably, Avient distributes 89.4% of its earnings as dividends, suggesting it may face challenges in sustaining its dividend payments in the future. Methanex, on the other hand, has a more conservative payout ratio at 25.1% of its earnings, highlighting its capacity to maintain dividends despite fluctuating earnings.
Avient has increased its dividend for one consecutive year, whereas Methanex has successfully raised its dividend for four consecutive years, indicating a more robust commitment to returning value to shareholders.
Company Profiles
Avient Corporation, headquartered in Avon Lake, Ohio, operates as a formulator of material solutions across various regions, including the United States, Canada, and Europe. The company focuses on two primary segments: Color, Additives and Inks, and Specialty Engineered Materials. Avient’s products cater to diverse industries, including medical devices, food packaging, personal care, and construction.
Established in 1885, Avient was formerly known as PolyOne Corporation before rebranding in June 2020.
Methanex Corporation, based in Vancouver, Canada, specializes in methanol production and supply across multiple markets, including China, Europe, and South America. The company also engages in methanol trading and possesses a fleet of approximately 30 ocean-going vessels, serving chemical and petrochemical producers. Founded in 1968, Methanex has established itself as a significant player in the global methanol industry.
In summary, Avient outperforms Methanex in nine of the 17 factors analyzed. Investors considering these two companies will need to weigh the various elements of volatility, profitability, and future potential to make informed decisions.
