Analyzing Green Plains (GPRE) and Braskem (BAK)
Green Plains (NASDAQ: GPRE) and Braskem (NYSE:BAK) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.
This table compares Green Plains and Braskem’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Green Plains pays an annual dividend of $0.48 per share and has a dividend yield of 2.6%. Braskem pays an annual dividend of $0.75 per share and has a dividend yield of 2.8%. Green Plains pays out -55.8% of its earnings in the form of a dividend. Braskem pays out 23.4% 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.
Volatility and Risk
Green Plains has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500. Comparatively, Braskem has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.
Valuation and Earnings
This table compares Green Plains and Braskem’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Green Plains||$3.60 billion||0.21||$61.06 million||($0.86)||-21.63|
|Braskem||$18.26 billion||0.58||$1.28 billion||$3.20||8.25|
Braskem has higher revenue and earnings than Green Plains. Green Plains is trading at a lower price-to-earnings ratio than Braskem, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
0.7% of Braskem shares are held by institutional investors. 5.9% of Green Plains shares are held by company insiders. Comparatively, 0.0% of Braskem shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current ratings and price targets for Green Plains and Braskem, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Green Plains presently has a consensus price target of $26.20, suggesting a potential upside of 40.86%. Given Green Plains’ higher probable upside, research analysts clearly believe Green Plains is more favorable than Braskem.
Braskem beats Green Plains on 9 of the 14 factors compared between the two stocks.
Green Plains Company Profile
Green Plains Inc. produces, markets, and distributes ethanol in the United States and internationally. The company operates through four segments: Ethanol Production; Agribusiness and Energy Services; Food and Ingredients; and Partnership. The Ethanol Production segment produces and sells ethanol, distiller grains, and corn oil. The Agribusiness and Energy Services segment engages in the grain procurement, handling, and storage activities; and commodity marketing business, which purchases, markets, sells, and distributes ethanol, distiller grains, and corn oil, as well as crude oil, grain, natural gas, and other commodities in various markets. This segment also provides grain drying and storage services to grain producers. The Food and Ingredients segment purchases and sells feeder cattle to meat processors; and produces and sells white distilled vinegar and various specialty vinegar, such as balsamic, red wine, white wine, cider, and other varietals primarily to the food industry participants, including branded food companies, private label food manufacturers, and companies serving the foodservice channel, as well as for retail and industrial uses. This segment also produces, trades in, and sells corn and soybean oil. The Partnership segment offers fuel storage and transportation services. As of December 31, 2017, this segment owned 39 ethanol storage facilities; 8 fuel terminal facilities; and approximately a fleet of 3,500 leased railcars. The company was formerly known as Green Plains Renewable Energy, Inc. and changed its name to Green Plains Inc. in May 2014. Green Plains Inc. was founded in 2004 and is headquartered in Omaha, Nebraska.
Braskem Company Profile
Braskem S.A., together with its subsidiaries, produces and sells thermoplastic resins. Its Basic Petrochemicals segment offers olefins, such as ethylene, polymer and chemical grade propylene, butadiene, and butene-1; BTX products comprising benzene, para-xylene, and toluene; fuels, including automotive gasoline, liquefied petroleum gas, ethyl tertiary butyl ether, and methyl tertiary butyl ether; intermediates, such as cumene; and aliphatics, aromatics, and hydrogenates solvents, as well as specialties, such as isoprene, dicyclopentadiene, piperylene, nonene, tetramer, polyisobutylene, and hydrocarbon resins. This segment also supplies electric energy, steam, compressed air, and other products to second-generation producers. Its Polyolefins segment produces polyethylene, including LDPE, LLDPE, HDPE, ultra-high molecular weight polyethylene, and EVA; green polyethylene from renewable resources; and polypropylene. This segment's products are used in plastic films for food and industrial packaging; bottles, shopping bags, and other consumer goods containers; automotive parts; engineering and infra-structure goods; and household appliances. Its Vinyls segment produces polyvinyl chloride, caustic soda, chlorine, hydrogen, caustic soda flake, and sodium hypochlorite. The company's USA and Europe segment produces polypropylene in the United States and Germany. Braskem S.A.'s Mexico segment produces, operates, and sells ethylene, HDPE, and LDPE in Mexico. It also imports and exports chemicals, petrochemicals, and fuels; produces, supplies, and sells utilities, such as steam, water, compressed air, and industrial gases; and provides industrial services. The company was formerly known as Copene Petroquímica do Nordeste S.A. and changed its name to Braskem S.A. in 2002. Braskem S.A. was founded in 1972 and is headquartered in São Paulo, Brazil.
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