Financial Survey: H & M Hennes & Mauritz AB (publ) (OTCMKTS:HNNMY) and Shin-Etsu Chemical (OTCMKTS:SHECY)

Shin-Etsu Chemical (OTCMKTS:SHECY) and H & M Hennes & Mauritz AB (publ) (OTCMKTS:HNNMY) are both large-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Shin-Etsu Chemical and H & M Hennes & Mauritz AB (publ), as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shin-Etsu Chemical	0	0	0	0	0.00
H & M Hennes & Mauritz AB (publ)	1	1	2	1	2.60

Risk and Volatility

Shin-Etsu Chemical has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, H & M Hennes & Mauritz AB (publ) has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Dividends

Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.5%. H & M Hennes & Mauritz AB (publ) pays an annual dividend of $0.07 per share and has a dividend yield of 2.7%. Shin-Etsu Chemical pays out 25.6% of its earnings in the form of a dividend. H & M Hennes & Mauritz AB (publ) pays out 58.3% 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.

Institutional and Insider Ownership

0.0% of Shin-Etsu Chemical shares are owned by institutional investors. Comparatively, 0.0% of H & M Hennes & Mauritz AB (publ) shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Shin-Etsu Chemical and H & M Hennes & Mauritz AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shin-Etsu Chemical	21.64%	11.24%	9.72%
H & M Hennes & Mauritz AB (publ)	4.30%	23.03%	5.76%

Earnings and Valuation

This table compares Shin-Etsu Chemical and H & M Hennes & Mauritz AB (publ)”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shin-Etsu Chemical	$16.73 billion	3.68	$3.44 billion	$0.90	17.22
H & M Hennes & Mauritz AB (publ)	$22.22 billion	0.83	$824.44 million	$0.12	21.84

Shin-Etsu Chemical has higher earnings, but lower revenue than H & M Hennes & Mauritz AB (publ). Shin-Etsu Chemical is trading at a lower price-to-earnings ratio than H & M Hennes & Mauritz AB (publ), indicating that it is currently the more affordable of the two stocks.

Summary

H & M Hennes & Mauritz AB (publ) beats Shin-Etsu Chemical on 8 of the 15 factors compared between the two stocks.

About Shin-Etsu Chemical

Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.

About H & M Hennes & Mauritz AB (publ)

H & M Hennes & Mauritz AB (publ) provides clothing, accessories, footwear, cosmetics, home textiles, and homeware for women, men, and children worldwide. It offers sportswear, shoes, bags, beauty products, activewear, jeans, and ready-to-wear; and interior products, including bed linens, dinnerware, textiles, furniture, and lighting. The company provides its products under the H&M, H&M HOME, H&M Move, H&M Beauty, COS, Weekday, Monki, & Other Stories, ARKET, Afound, and Singular Society brand names. In addition, it operates Sellpy, a broad digital platform for second-hand fashion and other products; and Creator Studio, a global platform for merchandise design and production, as well as provides solutions to extend the useful life of unwanted garments through reuse and recycling under Looper Textile name. The company offers its products through online and physical stores. H & M Hennes & Mauritz AB (publ) was incorporated in 1943 and is headquartered in Stockholm, Sweden.