Kronos Worldwide (NYSE:KRO) versus Basf (OTCMKTS:BASFY) Critical Survey

Basf (OTCMKTS:BASFY) and Kronos Worldwide (NYSE:KRO) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Basf and Kronos Worldwide, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Basf	2	2	2	0	2.00
Kronos Worldwide	4	0	0	0	1.00

Kronos Worldwide has a consensus price target of $6.00, indicating a potential upside of 11.34%. Given Kronos Worldwide’s higher probable upside, analysts clearly believe Kronos Worldwide is more favorable than Basf.

Volatility and Risk

Basf has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Kronos Worldwide has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Earnings & Valuation

This table compares Basf and Kronos Worldwide”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Basf	$70.63 billion	0.67	$1.40 billion	$0.10	132.07
Kronos Worldwide	$1.89 billion	0.33	$86.20 million	($0.36)	-14.97

Basf has higher revenue and earnings than Kronos Worldwide. Kronos Worldwide is trading at a lower price-to-earnings ratio than Basf, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

0.0% of Basf shares are owned by institutional investors. Comparatively, 15.1% of Kronos Worldwide shares are owned by institutional investors. 0.1% of Kronos Worldwide shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Basf pays an annual dividend of $0.44 per share and has a dividend yield of 3.3%. Kronos Worldwide pays an annual dividend of $0.20 per share and has a dividend yield of 3.7%. Basf pays out 440.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kronos Worldwide pays out -55.6% of its earnings in the form of a dividend. Kronos Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Basf and Kronos Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Basf	0.43%	6.86%	3.07%
Kronos Worldwide	-2.22%	-3.09%	-1.33%

Summary

Basf beats Kronos Worldwide on 10 of the 16 factors compared between the two stocks.

About Basf

BASF SE operates as a chemical company worldwide. It operates through six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. The Chemicals segment provides petrochemicals and intermediates. The Materials segment offers advanced materials and their precursors for applications and systems comprising isocyanates, polyamides, and inorganic basic products, as well as specialties for plastics and plastics processing industries. The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, resins, additives, electronic materials, and antioxidants for automotive, plastics, paints and coatings, electronics, and energy and resource industries. The Surface Technologies segment provides automotive OEM and refinish coatings, surface treatment, catalysts, battery materials, and precious and base metal services for the automotive and chemical sectors. The Nutrition & Care segment offers ingredients for consumer goods in the areas of nutrition, home, personal care, and technical applications; and serves the food and feed producers, pharmaceutical, cosmetics, detergents, cleaners, and crop protection industries, as well as fast-moving consumer goods sector. The Agricultural Solutions segment provides seeds and seed treatment products; fungicides, herbicides, insecticides, and biological crop protection products; and digital farming solutions. The company engages in engineering and other; rental and leasing; and commodity trading activities. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany.

About Kronos Worldwide

Kronos Worldwide, Inc. produces and markets titanium dioxide pigments (TiO2) in Europe, North America, the Asia Pacific, and internationally. The company produces TiO2 in two crystalline forms, rutile and anatase to impart whiteness, brightness, opacity, and durability for various products, including paints, coatings, plastics, paper, fibers, and ceramics, as well as for various specialty products, such as inks, foods, and cosmetics. It also produces ilmenite, a raw material used directly as a feedstock by sulfate-process TiO2 plants; iron-based chemicals, which are used as treatment and conditioning agents for industrial effluents and municipal wastewater, as well as in the manufacture of iron pigments, cement, and agricultural products; specialty chemicals for use in the formulation of pearlescent pigments, and production of electroceramic capacitors for cell phones and other electronic devices, as well as for use in natural gas pipe, and other specialty applications. In addition, the company provides technical services for its products. It sells its products under the KRONOS brand through agents and distributors to paint, plastics, decorative laminate, and paper manufacturers. The company was founded in 1916 and is headquartered in Dallas, Texas. Kronos Worldwide, Inc. is a subsidiary of Valhi, Inc.