Valhi (NYSE:VHI – Get Free Report) and Enlightify (NYSE:ENFY – Get Free Report) are both small-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.
Profitability
This table compares Valhi and Enlightify’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Valhi | 4.69% | 7.02% | 3.53% |
| Enlightify | -22.98% | -18.78% | -11.03% |
Analyst Ratings
This is a breakdown of recent ratings and price targets for Valhi and Enlightify, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Valhi | 1 | 1 | 0 | 0 | 1.50 |
| Enlightify | 1 | 0 | 0 | 0 | 1.00 |
Institutional and Insider Ownership
3.8% of Valhi shares are owned by institutional investors. Comparatively, 0.1% of Enlightify shares are owned by institutional investors. 0.2% of Valhi shares are owned by company insiders. Comparatively, 14.0% of Enlightify shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Valhi and Enlightify”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Valhi | $2.09 billion | 0.18 | $108.00 million | $3.43 | 3.94 |
| Enlightify | $79.21 million | 0.02 | -$28.41 million | ($1.05) | -0.09 |
Valhi has higher revenue and earnings than Enlightify. Enlightify is trading at a lower price-to-earnings ratio than Valhi, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Valhi has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Enlightify has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.
Summary
Valhi beats Enlightify on 12 of the 13 factors compared between the two stocks.
About Valhi
Valhi, Inc. engages in the chemicals, component products, and real estate management and development businesses in Europe, North America, the Asia Pacific, and internationally. The company’s Chemicals segment produces and markets titanium dioxide pigments (TiO2), which are white inorganic pigments used in various applications by paint, plastics, decorative laminate, and paper manufacturers. It offers TiO2 under the KRONOS name through agents and distributors. The company’s Component Products segment manufactures mechanical and electrical cabinet locks, and other locking mechanisms for use in ignition systems, mailboxes, file cabinets, desk drawers, tool storage cabinets, vending and cash containment machines, integrated inventory and access control secured narcotics boxes, medical cabinetry security, electronic circuit panels, storage compartments, and gas station security applications. It also provides stainless steel exhaust components, gauges, throttle controls, wake enhancement systems, trim tabs, and related hardware and accessories primarily for performance and ski/wakeboard boats. The company’s Real Estate Management and Development segment offers utility services to industrial and municipal customers; owns real properties; and develops land holdings for commercial, industrial, and residential purposes. It also holds marketable securities and other investments. The company was incorporated in 1932 and is based in Dallas, Texas. Valhi, Inc. is a subsidiary of Dixie Rice Agricultural L.L.C.
About Enlightify
Enlightify, Inc. engages in the research, development, production, and sale of various types of fertilizers and agricultural products. It operates through the following segments: Jinong, Gufeng, and Yuxing. The Jinong segment includes fertilizer products, with focus on humic acid-based compound fertilizer. The Gufeng segment refers to the compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizers, highly concentrated water-soluble fertilizers, and mixed organic-inorganic compound fertilizer. The Yuxing segment develops and produces agricultural products, such as top-grade fruits, vegetables, flowers, and colored seedlings. The company was founded by Tao Li on February 6, 1987 and is headquartered in Xi’an, China.
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