Gulf Resources (NASDAQ:GURE – Get Free Report) and Valhi (NYSE:VHI – Get Free Report) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.
Insider & Institutional Ownership
3.3% of Gulf Resources shares are owned by institutional investors. Comparatively, 3.8% of Valhi shares are owned by institutional investors. 3.2% of Gulf Resources shares are owned by insiders. Comparatively, 0.2% of Valhi shares are owned 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.
Analyst Recommendations
This is a summary of current recommendations and price targets for Gulf Resources and Valhi, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gulf Resources | 1 | 0 | 0 | 0 | 1.00 |
| Valhi | 2 | 0 | 0 | 0 | 1.00 |
Profitability
This table compares Gulf Resources and Valhi’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gulf Resources | -286.77% | -20.62% | -17.50% |
| Valhi | -2.77% | -3.20% | -1.65% |
Risk & Volatility
Gulf Resources has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, Valhi has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.
Valuation & Earnings
This table compares Gulf Resources and Valhi”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gulf Resources | $7.66 million | 1.01 | -$58.94 million | ($48.05) | -0.10 |
| Valhi | $2.08 billion | 0.20 | -$57.60 million | ($2.02) | -7.12 |
Valhi has higher revenue and earnings than Gulf Resources. Valhi is trading at a lower price-to-earnings ratio than Gulf Resources, indicating that it is currently the more affordable of the two stocks.
Summary
Valhi beats Gulf Resources on 9 of the 12 factors compared between the two stocks.
About Gulf Resources
Gulf Resources, Inc., through its subsidiaries, manufactures and trades bromine and crude salt, chemical products, and natural gas in the People’s Republic of China. The company operates through four segments: Bromine, Crude salt, Chemical products, and Natural gas segments. It also provides bromine for use in bromine compounds, intermediates in organic synthesis, brominated flame retardants, fumigants, water purification compounds, dyes, medicines, and disinfectants. In addition, the company offers crude salt for use as a material in alkali and chlorine alkali production for use in the chemical, food and beverage, and other industries. In addition, it manufactures and sells chemical products for use in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, and inorganic chemicals, as well as materials that are used for human and animal antibiotics. The company is based in Shouguang, the People’s Republic of China.
About Valhi
Valhi, Inc. engages in the chemicals, component products, and real estate management and development businesses in Europe, North America, the Asia Pacific, and internationally. The company’s Chemicals segment produces and markets titanium dioxide pigments (TiO2), which are white inorganic pigments used in various applications by paint, plastics, decorative laminate, and paper manufacturers. It offers TiO2 under the KRONOS name through agents and distributors. The company’s Component Products segment manufactures mechanical and electrical cabinet locks, and other locking mechanisms for use in ignition systems, mailboxes, file cabinets, desk drawers, tool storage cabinets, vending and cash containment machines, integrated inventory and access control secured narcotics boxes, medical cabinetry security, electronic circuit panels, storage compartments, and gas station security applications. It also provides stainless steel exhaust components, gauges, throttle controls, wake enhancement systems, trim tabs, and related hardware and accessories primarily for performance and ski/wakeboard boats. The company’s Real Estate Management and Development segment offers utility services to industrial and municipal customers; owns real properties; and develops land holdings for commercial, industrial, and residential purposes. It also holds marketable securities and other investments. The company was incorporated in 1932 and is based in Dallas, Texas. Valhi, Inc. is a subsidiary of Dixie Rice Agricultural L.L.C.
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