International Flavors & Fragrances (NYSE:IFF) and LyondellBasell Industries (NYSE:LYB) are both large-cap consumer staples companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.
Risk & Volatility
International Flavors & Fragrances has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, LyondellBasell Industries has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.
Dividends
International Flavors & Fragrances pays an annual dividend of $3.08 per share and has a dividend yield of 2.3%. LyondellBasell Industries pays an annual dividend of $4.20 per share and has a dividend yield of 4.1%. International Flavors & Fragrances pays out 49.9% of its earnings in the form of a dividend. LyondellBasell Industries pays out 43.7% 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. International Flavors & Fragrances has raised its dividend for 11 consecutive years. LyondellBasell Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares International Flavors & Fragrances and LyondellBasell Industries' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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International Flavors & Fragrances | 7.44% | 11.00% | 5.10% |
LyondellBasell Industries | 4.23% | 24.09% | 5.80% |
Insider and Institutional Ownership
94.4% of International Flavors & Fragrances shares are owned by institutional investors. Comparatively, 67.6% of LyondellBasell Industries shares are owned by institutional investors. 0.4% of International Flavors & Fragrances shares are owned by company insiders. Comparatively, 0.2% of LyondellBasell Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares International Flavors & Fragrances and LyondellBasell Industries' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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International Flavors & Fragrances | $5.14 billion | 2.82 | $455.87 million | $6.17 | 21.96 |
LyondellBasell Industries | $34.73 billion | 0.99 | $3.40 billion | $9.62 | 10.72 |
LyondellBasell Industries has higher revenue and earnings than International Flavors & Fragrances. LyondellBasell Industries is trading at a lower price-to-earnings ratio than International Flavors & Fragrances, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for International Flavors & Fragrances and LyondellBasell Industries, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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International Flavors & Fragrances | 0 | 4 | 8 | 0 | 2.67 |
LyondellBasell Industries | 2 | 13 | 9 | 0 | 2.29 |
International Flavors & Fragrances presently has a consensus target price of $141.1167, indicating a potential upside of 4.14%. LyondellBasell Industries has a consensus target price of $76.4091, indicating a potential downside of 25.88%. Given International Flavors & Fragrances' stronger consensus rating and higher probable upside, analysts clearly believe International Flavors & Fragrances is more favorable than LyondellBasell Industries.
Summary
LyondellBasell Industries beats International Flavors & Fragrances on 9 of the 17 factors compared between the two stocks.