Covestro (COVTY) & Its Rivals Financial Review

Covestro (OTCMKTS:COVTY) is one of 298 public companies in the “Chemicals” industry, but how does it contrast to its rivals? We will compare Covestro to similar businesses based on the strength of its earnings, analyst recommendations, valuation, risk, dividends, profitability and institutional ownership.

Risk & Volatility

Covestro has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, Covestro’s rivals have a beta of 1.24, meaning that their average stock price is 24% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Covestro and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Covestro	0	1	0	0	2.00
Covestro Competitors	3095	11876	13883	487	2.40

As a group, “Chemicals” companies have a potential upside of 8.91%. Given Covestro’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Covestro has less favorable growth aspects than its rivals.

Dividends

Covestro pays an annual dividend of $1.31 per share and has a dividend yield of 3.8%. Covestro pays out -51.8% of its earnings in the form of a dividend. As a group, “Chemicals” companies pay a dividend yield of 3.2% and pay out 107.8% of their earnings in the form of a dividend. Covestro is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Covestro and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Covestro	$14.64 billion	-$728.62 million	-13.50
Covestro Competitors	$8.02 billion	$217.41 million	-14.44

Covestro has higher revenue, but lower earnings than its rivals. Covestro is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Covestro and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Covestro	-6.97%	-13.22%	-6.31%
Covestro Competitors	-122.60%	-12.00%	-2.22%

Insider and Institutional Ownership

47.0% of shares of all “Chemicals” companies are owned by institutional investors. 13.8% of shares of all “Chemicals” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Covestro rivals beat Covestro on 10 of the 15 factors compared.

Covestro Company Profile

Covestro AG supplies high-tech polymer materials and application solutions. It operates in two segments, Performance Materials, and Solutions & Specialties. The Performance Materials segment develops, produces, and supplies high-performance materials, such as polyurethanes and polycarbonates, and base chemicals, which include diphenylmethane diisocyanate (MDI), toluylene diisocyanate, long-chain polyols, and polycarbonate resins for use in furniture and wood processing, construction, automotive, and transportation industries, as well as roof structures, insulation for buildings and refrigerators, mattresses, car seats, and other applications. The Solutions & Specialties segment comprises a range of polymer products, including polycarbonates, precursors for coatings and adhesives, MDI specialties and polyols, thermoplastic polyurethanes, specialty films, and elastomers that are used in automotive and transportation, electrical, electronics and household appliances, construction, and healthcare industries, as well as composite resins for solar panel frames, laptops, floodlights, and electric vehicle batteries. The company markets its products through trading houses and distributors. It operates in Europe, the Middle East, Africa, Latin America, the United States, Canada, and the People's Republic of China. The company was founded in 1863 and is headquartered in Leverkusen, Germany.