NL Industries (NYSE: NL) and Spectrum Brands Holdings (NYSE:SPB) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Risk & Volatility

NL Industries has a beta of 2.7, meaning that its share price is 170% more volatile than the S&P 500. Comparatively, Spectrum Brands Holdings has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Profitability

This table compares NL Industries and Spectrum Brands Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NL Industries 57.98% 32.04% 16.44%
Spectrum Brands Holdings 5.87% 17.46% 4.45%

Dividends

Spectrum Brands Holdings pays an annual dividend of $1.68 per share and has a dividend yield of 1.6%. NL Industries does not pay a dividend. Spectrum Brands Holdings pays out 34.3% of its earnings in the form of a dividend. NL Industries has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of current ratings and price targets for NL Industries and Spectrum Brands Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NL Industries 1 0 0 0 1.00
Spectrum Brands Holdings 0 1 7 0 2.88

NL Industries presently has a consensus target price of $6.00, indicating a potential downside of 31.03%. Spectrum Brands Holdings has a consensus target price of $145.29, indicating a potential upside of 37.83%. Given Spectrum Brands Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe Spectrum Brands Holdings is more favorable than NL Industries.

Valuation and Earnings

This table compares NL Industries and Spectrum Brands Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NL Industries $114.69 million 3.70 $8.15 million $1.37 6.35
Spectrum Brands Holdings $4.94 billion 1.24 $865.80 million $4.90 21.51

Spectrum Brands Holdings has higher revenue and earnings than NL Industries. NL Industries is trading at a lower price-to-earnings ratio than Spectrum Brands Holdings, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

9.6% of NL Industries shares are held by institutional investors. Comparatively, 47.1% of Spectrum Brands Holdings shares are held by institutional investors. 0.1% of NL Industries shares are held by company insiders. Comparatively, 1.0% of Spectrum Brands Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Spectrum Brands Holdings beats NL Industries on 10 of the 17 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.

Spectrum Brands Holdings Company Profile

Spectrum Brands Holdings, Inc. (SB Holdings) is a diversified global consumer products company. The Company manufactures, markets and/or distributes its products in approximately 160 countries in the North America (NA); Europe, the Middle East and Africa (EMEA); Latin America (LATAM), and Asia-Pacific (APAC) regions. It has five segments: Global Batteries & Appliances (GBA), Global Pet Supplies (PET), Home and Garden (H&G), Hardware & Home Improvement (HHI) and Global Auto Care (GAC). The Company’s GBA segment includes product categories, such as consumer batteries, small appliances and personal care. The Company’s HHI segment includes product categories, such as lockset, plumbing and hardware. The Company’s PET segment’s product categories include aquatics, companion animal and pet food. The Company’s H&G segment’s product categories include controls, household and repellents. The Company’s GAC segment’s product categories include appearance, performance and A/C recharge.

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