Kronos Worldwide (NYSE:KRO – Get Free Report) and Sumitomo Chemcl (OTCMKTS:SOMMY – Get Free Report) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.
Analyst Recommendations
This is a summary of current ratings for Kronos Worldwide and Sumitomo Chemcl, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Kronos Worldwide | 2 | 0 | 0 | 0 | 1.00 |
Sumitomo Chemcl | 0 | 0 | 0 | 0 | 0.00 |
Kronos Worldwide presently has a consensus target price of $7.75, suggesting a potential upside of 24.80%. Given Kronos Worldwide’s stronger consensus rating and higher possible upside, equities analysts plainly believe Kronos Worldwide is more favorable than Sumitomo Chemcl.
Profitability
Net Margins | Return on Equity | Return on Assets | |
Kronos Worldwide | 5.07% | 11.71% | 5.17% |
Sumitomo Chemcl | 1.44% | 3.31% | 1.01% |
Dividends
Kronos Worldwide pays an annual dividend of $0.20 per share and has a dividend yield of 3.2%. Sumitomo Chemcl pays an annual dividend of $0.28 per share and has a dividend yield of 2.3%. Kronos Worldwide pays out 24.1% of its earnings in the form of a dividend. Sumitomo Chemcl pays out 37.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kronos Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Kronos Worldwide has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Sumitomo Chemcl has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500.
Valuation and Earnings
This table compares Kronos Worldwide and Sumitomo Chemcl”s top-line revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Kronos Worldwide | $1.89 billion | 0.38 | $86.20 million | $0.83 | 7.48 |
Sumitomo Chemcl | $17.12 billion | 0.23 | $254.70 million | $0.75 | 16.10 |
Sumitomo Chemcl has higher revenue and earnings than Kronos Worldwide. Kronos Worldwide is trading at a lower price-to-earnings ratio than Sumitomo Chemcl, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
15.1% of Kronos Worldwide shares are held by institutional investors. 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 company is poised for long-term growth.
Summary
Kronos Worldwide beats Sumitomo Chemcl on 12 of the 15 factors compared between the two stocks.
About Kronos Worldwide
Kronos Worldwide, Inc. produces and markets titanium dioxide pigments (TiO2) in Europe, North America, the Asia Pacific, and internationally. The company produces TiO2 in two crystalline forms, rutile and anatase to impart whiteness, brightness, opacity, and durability for various products, including paints, coatings, plastics, paper, fibers, and ceramics, as well as for various specialty products, such as inks, foods, and cosmetics. It also produces ilmenite, a raw material used directly as a feedstock by sulfate-process TiO2 plants; iron-based chemicals, which are used as treatment and conditioning agents for industrial effluents and municipal wastewater, as well as in the manufacture of iron pigments, cement, and agricultural products; specialty chemicals for use in the formulation of pearlescent pigments, and production of electroceramic capacitors for cell phones and other electronic devices, as well as for use in natural gas pipe, and other specialty applications. In addition, the company provides technical services for its products. It sells its products under the KRONOS brand through agents and distributors to paint, plastics, decorative laminate, and paper manufacturers. The company was founded in 1916 and is headquartered in Dallas, Texas. Kronos Worldwide, Inc. is a subsidiary of Valhi, Inc.
About Sumitomo Chemcl
Sumitomo Chemical Company, Limited engages in Chemicals & Plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Essential Chemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; resorcinol for tires, wood adhesives, flame retardants, and ultraviolet ray absorbants; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists and polymer OLED for LC and OLED displays; photoresists and high-purity chemicals for the semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.
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