Analyzing Avient (NYSE:AVNT) & Arkema (OTCMKTS:ARKAY)

Avient (NYSE:AVNT) and Arkema (OTCMKTS:ARKAY) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Volatility & Risk

Avient has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, Arkema has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Dividends

Avient pays an annual dividend of $1.08 per share and has a dividend yield of 3.4%. Arkema pays an annual dividend of $3.02 per share and has a dividend yield of 5.1%. Avient pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arkema pays out 97.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avient has raised its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Avient and Arkema, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avient	0	4	4	1	2.67
Arkema	1	2	2	1	2.50

Avient presently has a consensus price target of $46.00, suggesting a potential upside of 45.52%. Given Avient’s stronger consensus rating and higher possible upside, analysts clearly believe Avient is more favorable than Arkema.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avient	$3.24 billion	0.89	$169.50 million	$1.28	24.70
Arkema	$10.33 billion	0.43	$383.06 million	$3.10	19.02

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

Insider & Institutional Ownership

95.5% of Avient shares are held by institutional investors. 0.9% of Avient shares are held 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.

Profitability

This table compares Avient and Arkema’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avient	3.65%	10.57%	4.17%
Arkema	2.41%	6.41%	3.31%

Summary

Avient beats Arkema on 13 of the 17 factors compared between the two stocks.

About Avient

Avient Corporation operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials. The Color, Additives and Inks segment offers custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, and specialty inks; custom-formulated liquid system, such as polyester, vinyl, natural rubber and latex, polyurethane, and silicone; and proprietary inks. Its products are used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable, recreational and athletic apparel, construction and filtration, outdoor furniture, healthcare, textiles and appliances, and industrial markets. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. It sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.

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.