Comparing NL Industries (NYSE:NL) and Westlake Chemical Partners (NYSE:WLKP)

NL Industries (NYSE:NL) and Westlake Chemical Partners (NYSE:WLKP) are both small-cap basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Insider & Institutional Ownership

10.7% of NL Industries shares are held by institutional investors. Comparatively, 78.3% of Westlake Chemical Partners shares are held by institutional investors. 0.3% of NL Industries shares are held by insiders. Comparatively, 1.1% of Westlake Chemical Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

NL Industries has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Westlake Chemical Partners has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Valuation & Earnings

This table compares NL Industries and Westlake Chemical Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NL Industries	$145.90 million	1.93	$67.23 million	$1.10	5.25
Westlake Chemical Partners	$1.14 billion	0.62	$62.39 million	$1.49	13.42

NL Industries has higher earnings, but lower revenue than Westlake Chemical Partners. NL Industries is trading at a lower price-to-earnings ratio than Westlake Chemical Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for NL Industries and Westlake Chemical Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NL Industries	0	1	0	0	2.00
Westlake Chemical Partners	0	2	0	0	2.00

Dividends

NL Industries pays an annual dividend of $0.36 per share and has a dividend yield of 6.2%. Westlake Chemical Partners pays an annual dividend of $1.89 per share and has a dividend yield of 9.5%. NL Industries pays out 32.7% of its earnings in the form of a dividend. Westlake Chemical Partners pays out 126.8% 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.

Profitability

This table compares NL Industries and Westlake Chemical Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NL Industries	35.06%	12.93%	9.69%
Westlake Chemical Partners	4.78%	6.38%	4.00%

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.

About Westlake Chemical Partners

Westlake Chemical Partners LP acquires, develops, and operates ethylene production facilities and related assets in the United States. The company’s ethylene production facilities primarily convert ethane into ethylene. It also sells ethylene co-products, such as propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on either a spot or contract basis. Westlake Chemical Partners GP LLC serves as the general partner of the company. Westlake Chemical Partners LP was founded in 1991 and is headquartered in Houston, Texas.