Comparing NL Industries (NYSE:NL) & Huabao International (OTCMKTS:HUIHY)

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

Profitability

This table compares NL Industries and Huabao International’s 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%
Huabao International	N/A	N/A	N/A

Risk & Volatility

NL Industries has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, Huabao International has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for NL Industries and Huabao International, as provided by MarketBeat.com.

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

Insider and Institutional Ownership

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

Earnings & Valuation

This table compares NL Industries and Huabao International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NL Industries	$145.90 million	2.07	$67.23 million	$1.10	5.61
Huabao International	$469.25 million	1.88	-$53.62 million	N/A	N/A

NL Industries has higher earnings, but lower revenue than Huabao International.

Dividends

NL Industries pays an annual dividend of $0.36 per share and has a dividend yield of 5.8%. Huabao International pays an annual dividend of $0.06 per share and has a dividend yield of 0.4%. NL Industries pays out 32.7% of its earnings in the form of a dividend. NL Industries has raised 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.

Summary

NL Industries beats Huabao International on 10 of the 13 factors compared between the two stocks.

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 Huabao International

Huabao International Holdings Limited, an investment holding company, researches, develops, produces, distributes, and sells flavours and fragrances, food ingredients, tobacco and aroma raw materials, and condiment products primarily in the People's Republic of China. It offers paper-making reconstituted tobacco leaves and new materials products for the tobacco industry. The company is also involved in the production and sale of natural extracts; tobacco flavours and fragrances; filter materials; cigarette filters; synthetic perfumes; and food flavours and fragrances. Huabao International Holdings Limited was founded in 1996 and is headquartered in Wan Chai, Hong Kong.