NL Industries (NYSE:NL – Get Free Report) and Orion (NYSE:OEC – Get Free Report) are both small-cap basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for NL Industries and Orion, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NL Industries | 0 | 1 | 0 | 0 | 2.00 |
| Orion | 3 | 2 | 0 | 0 | 1.40 |
Orion has a consensus target price of $5.92, suggesting a potential downside of 23.94%. Given Orion’s higher possible upside, analysts plainly believe Orion is more favorable than NL Industries.
Risk and Volatility
Profitability
This table compares NL Industries and Orion’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NL Industries | -21.56% | -8.74% | -7.02% |
| Orion | -4.98% | 2.23% | 0.47% |
Earnings and Valuation
This table compares NL Industries and Orion”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NL Industries | $158.30 million | 1.87 | -$37.83 million | ($0.69) | -8.78 |
| Orion | $1.79 billion | 0.25 | -$70.10 million | ($1.60) | -4.86 |
NL Industries has higher earnings, but lower revenue than Orion. NL Industries is trading at a lower price-to-earnings ratio than Orion, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
10.7% of NL Industries shares are held by institutional investors. Comparatively, 94.3% of Orion shares are held by institutional investors. 0.3% of NL Industries shares are held by company insiders. Comparatively, 3.1% of Orion shares are held by company 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.
Dividends
NL Industries pays an annual dividend of $0.40 per share and has a dividend yield of 6.6%. Orion pays an annual dividend of $0.08 per share and has a dividend yield of 1.0%. NL Industries pays out -58.0% of its earnings in the form of a dividend. Orion pays out -5.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 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
Orion beats NL Industries on 9 of the 16 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 Orion
Orion S.A., together with its subsidiaries, engages in the manufacture and sale of carbon black products. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for batteries, polymers, and coatings. It also provides rubber carbon black products for applications in mechanical rubber goods, as well as in tires under the ECORAX brand name; and acetylene-based conductive additives for lithium-ion batteries and other applications. It operates in the United States, Brazil, rest of the Americas, Germany, South Africa, Italy, Spain, Turkey, France, Rest of EMEA, China, the Republic of Korea, and rest of Asia. The company was formerly known as Orion Engineered Carbons S.A. and changed its name to Orion S.A. in June 2023. Orion S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.
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