Valhi (VHI) & Its Competitors Critical Contrast

Valhi (NYSE:VHI) is one of 296 publicly-traded companies in the “Chemicals” industry, but how does it weigh in compared to its peers? We will compare Valhi to related businesses based on the strength of its valuation, profitability, dividends, institutional ownership, analyst recommendations, risk and earnings.

Risk and Volatility

Valhi has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Valhi’s peers have a beta of 0.94, suggesting that their average share price is 6% less volatile than the S&P 500.

Earnings & Valuation

This table compares Valhi and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Valhi	$2.08 billion	-$57.60 million	334.10
Valhi Competitors	$6.34 billion	$229.42 million	20.00

Valhi’s peers have higher revenue and earnings than Valhi. Valhi is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Valhi pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. Valhi pays out 640.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Chemicals” companies pay a dividend yield of 3.1% and pay out 103.5% of their earnings in the form of a dividend. Valhi lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Valhi and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valhi	0.06%	0.09%	0.05%
Valhi Competitors	-54.14%	-0.61%	-1.37%

Institutional & Insider Ownership

3.8% of Valhi shares are owned by institutional investors. Comparatively, 47.4% of shares of all “Chemicals” companies are owned by institutional investors. 0.2% of Valhi shares are owned by insiders. Comparatively, 13.7% of shares of all “Chemicals” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Valhi and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valhi	1	0	0	0	1.00
Valhi Competitors	3272	12238	14147	520	2.39

As a group, “Chemicals” companies have a potential upside of 6.98%. Given Valhi’s peers stronger consensus rating and higher probable upside, analysts clearly believe Valhi has less favorable growth aspects than its peers.

Summary

Valhi peers beat Valhi on 10 of the 15 factors compared.

About Valhi

Valhi, Inc. is a holding company whose businesses operate through subsidiaries in chemicals, component products, waste management and real estate. Its chemical operations include an interest in Kronos Worldwide, a producer and marketer of titanium dioxide pigments used to add whiteness, brightness and opacity to products such as paints, plastics and paper. Through CompX International, Valhi is also involved in manufacturing security products and marine components. Its waste-management subsidiary, Waste Control Specialists, provides disposal and related services for certain low-level radioactive, hazardous and industrial wastes at its facility in Andrews County, Texas.