Reviewing NL Industries (NYSE:NL) and Novozymes A/S (OTCMKTS:NVZMY)

Novozymes A/S (OTCMKTS:NVZMY) and NL Industries (NYSE:NL) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Volatility and Risk

Novozymes A/S has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, NL Industries has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500.

Valuation and Earnings

This table compares Novozymes A/S and NL Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novozymes A/S	$4.15 billion	7.07	$330.91 million	$1.69	37.07
NL Industries	$145.90 million	1.84	$67.23 million	$0.20	27.43

Novozymes A/S has higher revenue and earnings than NL Industries. NL Industries is trading at a lower price-to-earnings ratio than Novozymes A/S, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Novozymes A/S and NL Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novozymes A/S	N/A	N/A	N/A
NL Industries	6.10%	2.36%	1.83%

Insider and Institutional Ownership

0.0% of Novozymes A/S shares are held by institutional investors. Comparatively, 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, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Novozymes A/S pays an annual dividend of $0.37 per share and has a dividend yield of 0.6%. NL Industries pays an annual dividend of $0.36 per share and has a dividend yield of 6.6%. Novozymes A/S pays out 21.9% of its earnings in the form of a dividend. NL Industries pays out 180.0% 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. NL Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Novozymes A/S and NL Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novozymes A/S	0	1	0	0	2.00
NL Industries	0	1	0	0	2.00

About Novozymes A/S

Novozymes A/S produces and sells industrial enzymes, microorganisms, and probiotics in Denmark, rest of Europe, North America, Asia Pacific, the Middle East, Africa, Latin America, and internationally. The company offers protein solutions for the food and beverage industry. It also offers industrial hygiene, drain openers, hard surface, medical cleaning, septic tanks, ware washing, and professional laundry services. In addition, the company provides dishwashing, softener, microbial and medical cleaning services. Further, it provides corn, cotton, forages, peanuts, pulses, soybeans, wheat, small grains, bioyield, and biocontrol solutions; warm water species, recirculating aquaculture system; animal health and nutrition solutions; fiber modification, bleach boosting, deposit control, and starch modification solutions. Additionally, the company provides carbon capture, leather and textiles solutions; enzyme solutions, including corn and wheat separation, liquefaction, saccharification, filtration, isomerization, maltose, and specialties solutions; warm water species and recirculating aquaculture system solutions; human health solutions, comprising brain, oral, protective and immune, and gastrointestinal health solutions; ethanol, biodiesel, renewable diesel, education, wastewater, and sewage sludge, and renewable diesel solutions; agriculture and industry, biogas food waste, food waste, biocatalysis, cell culture, diagnostics, enzyme, and biogas solutions. Furthermore, it provides lipases, proteases, oxidoreductases, and carbohydrases. Novozymes A/S was founded in 1925 and is based in Bagsvaerd, Denmark.

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.