H. B. Fuller (NYSE:FUL) vs. Methanex (NASDAQ:MEOH) Critical Review

Methanex (NASDAQ:MEOH) and H. B. Fuller (NYSE:FUL) are both mid-cap materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Analyst Ratings

This is a breakdown of current recommendations for Methanex and H. B. Fuller, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Methanex	0	3	7	1	2.82
H. B. Fuller	0	3	4	1	2.75

Methanex presently has a consensus price target of $73.78, suggesting a potential upside of 6.93%. H. B. Fuller has a consensus price target of $62.88, suggesting a potential upside of 21.98%. Given H. B. Fuller’s higher possible upside, analysts plainly believe H. B. Fuller is more favorable than Methanex.

Risk and Volatility

Methanex has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, H. B. Fuller has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares Methanex and H. B. Fuller’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Methanex	7.62%	20.89%	8.15%
H. B. Fuller	5.56%	12.65%	4.97%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Methanex	$3.59 billion	1.49	$79.88 million	$4.54	15.20
H. B. Fuller	$3.47 billion	0.80	$151.97 million	$3.59	14.36

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

Institutional and Insider Ownership

73.5% of Methanex shares are owned by institutional investors. Comparatively, 95.9% of H. B. Fuller shares are owned by institutional investors. 1.0% of Methanex shares are owned by company insiders. Comparatively, 1.8% of H. B. Fuller shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 1.1%. H. B. Fuller pays an annual dividend of $0.98 per share and has a dividend yield of 1.9%. Methanex pays out 16.3% of its earnings in the form of a dividend. H. B. Fuller pays out 27.3% 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 increased its dividend for 4 consecutive years and H. B. Fuller has increased its dividend for 57 consecutive years. H. B. Fuller is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Methanex beats H. B. Fuller on 10 of the 17 factors compared between the two stocks.

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.

About H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.