Kraton (NYSE: KRA) and Eastman Chemical (NYSE:EMN) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.
Dividends
Get Kraton alerts:Eastman Chemical pays an annual dividend of $2.24 per share and has a dividend yield of 2.1%. Kraton does not pay a dividend. Eastman Chemical pays out 29.4% of its earnings in the form of a dividend. Eastman Chemical has raised its dividend for 6 consecutive years.
Institutional and Insider Ownership
97.3% of Kraton shares are held by institutional investors. Comparatively, 83.9% of Eastman Chemical shares are held by institutional investors. 4.7% of Kraton shares are held by insiders. Comparatively, 1.1% of Eastman Chemical shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Kraton and Eastman Chemical’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Kraton | $1.96 billion | 0.79 | $97.54 million | $2.85 | 17.10 |
| Eastman Chemical | $9.55 billion | 1.59 | $1.38 billion | $7.61 | 13.96 |
Eastman Chemical has higher revenue and earnings than Kraton. Eastman Chemical is trading at a lower price-to-earnings ratio than Kraton, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Kraton and Eastman Chemical’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Kraton | 5.65% | 18.07% | 3.80% |
| Eastman Chemical | 15.08% | 22.14% | 7.25% |
Risk and Volatility
Kraton has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Eastman Chemical has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Kraton and Eastman Chemical, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Kraton | 1 | 1 | 2 | 0 | 2.25 |
| Eastman Chemical | 0 | 7 | 8 | 0 | 2.53 |
Kraton presently has a consensus price target of $56.33, suggesting a potential upside of 15.60%. Eastman Chemical has a consensus price target of $104.79, suggesting a potential downside of 1.39%. Given Kraton’s higher probable upside, equities analysts clearly believe Kraton is more favorable than Eastman Chemical.
Summary
Eastman Chemical beats Kraton on 12 of the 17 factors compared between the two stocks.
About Kraton
Kraton Corporation manufactures and sells styrenic block copolymers and other engineered polymers in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Polymer and Chemical. The Polymer segment offers performance products, including styrene-butadiene-styrene and styrene-isoprene-styrene; and specialty polymers, such as hydrogenated styrenic block copolymers, as well as isoprene rubber and isoprene rubber latex for use in medical and personal care products, adhesives, tackifiers, paints, and coatings. The Chemical segment provides pine-based specialty products that include rosin-based tackifiers for packaging and pressure-sensitive adhesive applications; terpene-based tackifiers for bookbinding, hygiene, and pressure-sensitive adhesive applications; alpha-methyl-styrene (AMS) resins for bookbinding and pressure-sensitive adhesive applications; and hot melt polyamides for flexible packaging. It also provides rosin-based binders for the thermoplastic pavement marking submarket; sells tall oil fatty acids for the asphalt paving market; and produces rosin esters and insoluble maleic-based tackifiers, as well as bitumen additives. In addition, this segment offers terpene-based tread enhancement resins and AMS-based tread enhancement additives, as well as distilled tall oil and rosins for enhancing the performance and manufacturing of high performance, winter, and all-season tires. Further, it provides dimer acids, tall oil rosins, and terpene fractions for fuel additive, oilfield chemical, mining fluid, coating, metalworking fluid and lubricant, and other applications. The company sells its products through various channels, including direct sales force, marketing representatives, and distributors under the Kraton and Cariflex brands. The company was formerly known as Kraton Performance Polymers, Inc. and changed its name to Kraton Corporation in September 2016. Kraton Corporation is based in Houston, Texas.
About Eastman Chemical
Eastman Chemical Company manufactures and sells materials, specialty additives, chemicals, and fibers in the United States and internationally. The company's Additives & Functional Products segment offers specialty coalescents, specialty and commodity solvents, paint additives, and specialty polymers; hydrocarbon and rosin resins; insoluble sulfur and antidegradant rubber additives; performance resins and amine derivative-based building blocks; heat transfer and aviation fluids; formic acid-based solutions; and metam-based soil fumigants, thiram and ziram based fungicides, and plant growth regulators. Its products are used in transportation, consumables, building and construction, industrial applications, animal nutrition, care chemicals, crop protection, and energy markets. Its Advanced Materials segment provides copolyesters, cellulose esters, polyvinyl butyral (PVB) sheets, specialty (PVB) intermediates, and window film and protective film, and aftermarket applied film products for value-added end uses in transportation, consumables, building and construction, durable goods, and health and wellness markets. The company's Chemical Intermediates segment offers Olefin derivatives, acetyl derivatives, ethylene, and commodity solvents; primary non-phthalate and phthala plasticizers, and a range of niche non- phthalate plasticizers; and methylamines and salts higher amines and solvents. Its Fibers segment manufactures and sells cellulose acetate tow for use in filtration media primarily cigarette filters; triacetin, cellulose acetate flake, and acetyl raw materials for other acetate fiber producers; and natural, acetate, and polyester yarn, as well as solution-dyed acetate yarn for use in apparel, home furnishings, and industrial fabrics. The company also offers aviation turbine engine oil; wet-laid nonwovens; and specialty films. Eastman Chemical Company was founded in 1920 and is headquartered in Kingsport, Tennessee.
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