Head to Head Comparison: Braskem (BAK) versus Renewable Energy Group (REGI)

Braskem (NYSE: BAK) and Renewable Energy Group (NASDAQ:REGI) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Dividends

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Braskem pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Renewable Energy Group does not pay a dividend. Braskem pays out 23.4% of its earnings in the form of a dividend.

Institutional and Insider Ownership

0.7% of Braskem shares are held by institutional investors. 0.0% of Braskem shares are held by insiders. Comparatively, 2.0% of Renewable Energy Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Braskem has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, Renewable Energy Group has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Profitability

This table compares Braskem and Renewable Energy Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Braskem 7.61% 70.94% 7.64%
Renewable Energy Group -3.66% -8.19% -4.45%

Valuation & Earnings

This table compares Braskem and Renewable Energy Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Braskem $18.26 billion 0.60 $1.28 billion $3.20 8.64
Renewable Energy Group $2.16 billion 0.24 -$79.07 million ($2.04) -6.57

Braskem has higher revenue and earnings than Renewable Energy Group. Renewable Energy Group is trading at a lower price-to-earnings ratio than Braskem, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Braskem and Renewable Energy Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Braskem 0 0 2 0 3.00
Renewable Energy Group 0 1 2 0 2.67

Renewable Energy Group has a consensus target price of $15.33, suggesting a potential upside of 14.43%. Given Renewable Energy Group’s higher possible upside, analysts plainly believe Renewable Energy Group is more favorable than Braskem.

Summary

Braskem beats Renewable Energy Group on 11 of the 14 factors compared between the two stocks.

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.

Renewable Energy Group Company Profile

Renewable Energy Group, Inc. is focused on providing cleaner, lower carbon intensity products and services. The Company is a producer of biomass-based diesel in North America. Its segments include Biomass-based diesel, Services, Renewable Chemicals and Corporate and other activities. It is involved in various activities related to biomass-based diesel production, from acquiring feedstock, managing construction and operating biomass-based diesel production facilities to marketing, selling and distributing biomass-based diesel and its co-products. As of December 31, 2016, it owned and operated a network of 14 biorefineries. As of December 31, 2016, 12 biorefineries were located in the United States and two in Germany, and 13 of which produce biodiesel or renewable hydrocarbon diesel and had an aggregate nameplate production capacity of 502 million gallons per year (mmgy). As of December 31, 2016, it also operated one microbial fermentation facility and one feedstock processing facility.

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