Reviewing NL Industries (NYSE:NL) & Elementis (OTCMKTS:ELMTY)

Elementis (OTCMKTS:ELMTY) and NL Industries (NYSE:NL) are both small-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

10.7% of NL Industries shares are owned by institutional investors. 0.3% of NL Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Elementis	N/A	N/A	N/A
NL Industries	35.06%	12.93%	9.69%

Risk and Volatility

Elementis has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500. Comparatively, NL Industries has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500.

Dividends

Elementis pays an annual dividend of $0.08 per share and has a dividend yield of 1.0%. NL Industries pays an annual dividend of $0.36 per share and has a dividend yield of 6.8%. NL Industries pays out 180.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NL Industries has increased its dividend for 2 consecutive years. NL Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Elementis and NL Industries”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elementis	$738.30 million	1.62	-$47.80 million	N/A	N/A
NL Industries	$159.00 million	1.63	$67.23 million	$0.20	26.58

NL Industries has lower revenue, but higher earnings than Elementis.

Analyst Recommendations

This is a breakdown of current ratings for Elementis and NL Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elementis	0	0	0	0	0.00
NL Industries	0	1	0	0	2.00

Summary

NL Industries beats Elementis on 11 of the 13 factors compared between the two stocks.

About Elementis

Elementis plc operates as a specialty chemical company in the United Kingdom, rest of Europe, North America, and internationally. It operates in two segments, Performance Specialties and Personal Care. The Performance Specialties segment engages in the production of rheological modifiers and additives for decorative and industrial coatings; and production and supply of talc for use in plastics, coatings, technical ceramics, and paper sectors. The Personal Care segment provides rheological modifiers and compounded products, including active ingredients for antiperspirants (AP) deodorants for personal care manufacturers. The company offers personal care products for antiperspirants, color cosmetics, and skin care applications; and performance specialties products for architectural coatings, adhesives, sealants and construction additives, and talc applications. Elementis plc was founded in 1844 and is headquartered in London, the United Kingdom.

About NL Industries

NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in Europe, North America, the Asia Pacific, and internationally. The company manufactures and sells mechanical and electronic cabinet locks and other locking mechanisms, including disc tumbler locks; pin tumbler locking mechanisms under KeSet, System 64, TuBar, and Turbine brands; and electronic locks under CompX eLock and StealthLock brands for use in various applications, such as mailboxes, ignition systems, file cabinets, desk drawers, tool storage cabinets, high security medical cabinetry, integrated inventory and access control secured narcotics boxes, electronic circuit panels, storage compartments, gas station security, vending and cash containment machines. It also offers original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers, and other exhaust components; gauges, such as GPS speedometers and tachometers; mechanical and electronic controls and throttles; wake enhancement devices, trim tabs, steering wheels, and other billet aluminum accessories; dash panels, LED indicators, wire harnesses, and other accessories; and grab handles, pin cleats, and other accessories; primarily for performance and ski/wakeboard and performance boats. In addition, the company produces and markets value-added titanium dioxide pigments, a base industrial product used in imparting whiteness, brightness, opacity, and durability to a diverse range of customer applications and end-use markets, including coatings, plastics, paper, inks, cosmetics, pharmaceuticals, and other industrial and consumer products. The company sells its component products directly to original equipment manufacturers, as well as through distributors. NL Industries, Inc. was founded in 1891 and is based in Dallas, Texas. NL Industries, Inc. operates as a subsidiary of Valhi, Inc.