Versum Materials (NYSE: VSM) and Kronos Worldwide (NYSE:KRO) are both mid-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitabiliy, earnings, analyst recommendations, valuation and risk.

Dividends

Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Kronos Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 3.3%. Kronos Worldwide pays out 24.9% of its earnings in the form of a dividend.

Institutional and Insider Ownership

88.6% of Versum Materials shares are held by institutional investors. Comparatively, 14.4% of Kronos Worldwide shares are held by institutional investors. 0.5% of Versum Materials shares are held by insiders. Comparatively, 0.1% of Kronos Worldwide shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Versum Materials and Kronos Worldwide’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Versum Materials $1.08 billion 3.52 $355.80 million N/A N/A
Kronos Worldwide $1.50 billion 1.40 $240.60 million $2.41 7.52

Versum Materials has higher revenue, but lower earnings than Kronos Worldwide.

Profitability

This table compares Versum Materials and Kronos Worldwide’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Versum Materials 17.91% -261.88% 18.25%
Kronos Worldwide 18.57% 27.56% 9.54%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Versum Materials and Kronos Worldwide, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Versum Materials 0 4 6 0 2.60
Kronos Worldwide 1 1 0 0 1.50

Versum Materials presently has a consensus price target of $33.78, suggesting a potential downside of 3.27%. Kronos Worldwide has a consensus price target of $17.00, suggesting a potential downside of 6.18%. Given Versum Materials’ stronger consensus rating and higher probable upside, equities analysts clearly believe Versum Materials is more favorable than Kronos Worldwide.

Summary

Versum Materials beats Kronos Worldwide on 10 of the 14 factors compared between the two stocks.

About Versum Materials

Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.

About Kronos Worldwide

Kronos Worldwide, Inc. (Kronos) is a producer and marketer of titanium dioxide (TiO2) pigments, a base industrial product that is used in a range of applications. The Company, along with its distributors and agents, sells and provides technical services for its products with sales in Europe and North America. It offers its customers a portfolio of products that include TiO2 pigment grades under the Kronos brand, which provides a range of performance properties. It offers its products to domestic and international paint, plastics, decorative laminate and paper manufacturers. It ships TiO2 to its customers in either a powder or slurry form through rail, truck or ocean carrier. It sells and provides technical services for its products in three end use markets, which include coatings, plastics and paper. It produces TiO2 in two crystalline forms, which include rutile and anatase. Rutile TiO2 is manufactured using both a chloride production process and a sulfate production process.

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