NL Industries (NYSE: NL) and General Cable Corporation (NYSE:BGC) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Profitability

This table compares NL Industries and General Cable Corporation’s 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%
General Cable Corporation -4.80% 13.47% 1.10%

Insider & Institutional Ownership

9.6% of NL Industries shares are held by institutional investors. Comparatively, 98.9% of General Cable Corporation shares are held by institutional investors. 0.1% of NL Industries shares are held by company insiders. Comparatively, 1.8% of General Cable Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

NL Industries has a beta of 2.68, suggesting that its stock price is 168% more volatile than the S&P 500. Comparatively, General Cable Corporation has a beta of 2.82, suggesting that its stock price is 182% more volatile than the S&P 500.

Dividends

General Cable Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 4.1%. NL Industries does not pay a dividend. General Cable Corporation pays out -20.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares NL Industries and General Cable Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NL Industries $114.69 million 3.23 $8.15 million $1.37 5.55
General Cable Corporation $3.70 billion 0.23 $209.90 million ($3.57) -4.87

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

Analyst Recommendations

This is a summary of recent ratings and target prices for NL Industries and General Cable Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NL Industries 1 0 0 0 1.00
General Cable Corporation 0 2 0 0 2.00

NL Industries presently has a consensus price target of $6.00, indicating a potential downside of 21.05%. Given NL Industries’ higher possible upside, equities research analysts plainly believe NL Industries is more favorable than General Cable Corporation.

Summary

General Cable Corporation beats NL Industries on 8 of the 14 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.

General Cable Corporation Company Profile

General Cable Corporation is engaged in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for use in the energy, industrial, construction, specialty and communications markets. The Company’s segments include North America, Europe, Latin America, and Africa/Asia Pacific. The Company produces and sells to a range of end markets, including markets for electric utility, electrical infrastructure, communications, construction and rod mill products. As of December 31, 2016, the North America segment included 17 manufacturing facilities across the region. The Europe segment consists of six manufacturing facilities across the region. The Latin America segment consists of six manufacturing facilities across the region. The Africa/Asia Pacific segment consists of four manufacturing facilities across the segment.

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