NL Industries (NYSE: NL) and Polar Power (NASDAQ:POLA) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitabiliy.

Analyst Ratings

This is a summary of recent recommendations for NL Industries and Polar Power, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NL Industries 1 0 0 0 1.00
Polar Power 0 0 1 0 3.00

NL Industries currently has a consensus price target of $6.00, indicating a potential downside of 18.37%. Polar Power has a consensus price target of $7.00, indicating a potential upside of 46.44%. Given Polar Power’s stronger consensus rating and higher probable upside, analysts clearly believe Polar Power is more favorable than NL Industries.

Insider & Institutional Ownership

6.5% of NL Industries shares are held by institutional investors. Comparatively, 12.6% of Polar Power shares are held by institutional investors. 0.1% of NL Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares NL Industries and Polar Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NL Industries 23.55% 13.97% 6.94%
Polar Power N/A N/A N/A

Valuation & Earnings

This table compares NL Industries and Polar Power’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NL Industries $111.79 million 3.20 $6.88 million $0.54 13.61
Polar Power $24.38 million 1.99 $7.64 million N/A N/A

Polar Power has higher revenue, but lower earnings than NL Industries.

Summary

NL Industries beats Polar Power on 7 of the 12 factors compared between the two stocks.

NL Industries Company Profile

NL Industries, Inc. is a holding company. The Company operates in the component products industry through its subsidiary, CompX International Inc. (CompX). The Company operates in the chemicals industry through its non-controlling interest in Kronos Worldwide, Inc. (Kronos). The Company, through Compx, manufactures engineered components that are sold to a range of industries, including recreational transportation (including boats), postal, office and institutional furniture, cabinetry, tool storage, healthcare, gas stations and vending equipment. Kronos is a global producer and marketer of value-added titanium dioxide pigments (TiO2), a base industrial product used in imparting whiteness, brightness and opacity to a range of customer applications and end use markets, including coatings, plastics, paper, inks, food, cosmetics, and other industrial and consumer products. Kronos has production facilities in Europe and North America.

Polar Power Company Profile

Polar Power, Inc. is engaged in designing, manufacturing and selling direct current (DC) power systems for applications primarily in the telecommunications, military, electric vehicle charging, cogeneration, distributed power and uninterruptable power supply markets. Within the telecommunications market, the Company’s DC power systems provide DC power to service applications that do not have access to the utility grid (such as off-grid applications) or have critical power needs and cannot be without power in the event of utility grid failure (such as back-up power applications). Its product offerings include DC base power systems, DC hybrid power systems and DC solar hybrid power systems. The Company’s technologies include Permanent Magnet Homopolar Hybrid (PMHH) Technology and Supra Controller Technology. Its power and control system architecture is controlled by its digital control system, Supra Controller, which contains software configured to meet specific application needs.

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