NL Industries (NYSE: NL) and Itron (NASDAQ:ITRI) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Institutional and Insider Ownership

9.3% of NL Industries shares are owned by institutional investors. Comparatively, 93.5% of Itron shares are owned by institutional investors. 0.1% of NL Industries shares are owned by insiders. Comparatively, 2.0% of Itron shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
NL Industries 67.61% 33.69% 17.82%
Itron 3.42% 14.84% 6.26%

Analyst Ratings

This is a breakdown of current recommendations for NL Industries and Itron, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NL Industries 1 0 0 0 1.00
Itron 0 4 4 0 2.50

NL Industries presently has a consensus price target of $14.00, suggesting a potential upside of 6.46%. Itron has a consensus price target of $81.75, suggesting a potential upside of 18.39%. Given Itron’s stronger consensus rating and higher possible upside, analysts plainly believe Itron is more favorable than NL Industries.

Risk and Volatility

NL Industries has a beta of 2.86, indicating that its stock price is 186% more volatile than the S&P 500. Comparatively, Itron has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Earnings and Valuation

This table compares NL Industries and Itron’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NL Industries $108.90 million 5.88 $15.32 million $1.58 8.32
Itron $2.01 billion 1.33 $31.77 million $1.71 40.38

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

Summary

Itron beats NL Industries on 9 of the 14 factors compared between the two stocks.

About NL Industries

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.

About Itron

Itron, Inc. (Itron) is a technology and service company. The Company provides solutions that measure, manage and analyze energy and water use. The Company operates through three segments: Electricity, Gas and Water. It provides a portfolio of products, solutions, software and services to electric, gas and water utility customers across the globe. It offers solutions that enable electric and natural gas utilities to build smart grids to manage assets. It offers a product portfolio, including standard meters and smart metering products, systems and services, for applications in the residential and commercial industrial markets for water and heat. The Company operates under the Itron brand across the world. Its Gas and Water manufacturing facilities are located throughout the world, while its Electricity manufacturing facilities are located in Europe, Middle East and Africa (EMEA), and North America.

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