Valhi (NYSE:VHI – Get Free Report) and REX American Resources (NYSE:REX – Get Free Report) are both small-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.
Insider and Institutional Ownership
4.9% of Valhi shares are owned by institutional investors. Comparatively, 79.6% of REX American Resources shares are owned by institutional investors. 0.1% of Valhi shares are owned by company insiders. Comparatively, 12.2% of REX American Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Valhi and REX American Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|REX American Resources||3.18%||5.46%||4.87%|
Valuation & Earnings
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Valhi||$2.22 billion||0.17||$90.20 million||$0.24||55.67|
|REX American Resources||$845.14 million||0.81||$27.70 million||$1.47||26.83|
Valhi has higher revenue and earnings than REX American Resources. REX American Resources is trading at a lower price-to-earnings ratio than Valhi, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Valhi and REX American Resources, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|REX American Resources||0||0||1||0||3.00|
Valhi currently has a consensus price target of $7.88, indicating a potential downside of 41.06%. REX American Resources has a consensus price target of $45.00, indicating a potential upside of 14.10%. Given REX American Resources’ higher possible upside, analysts plainly believe REX American Resources is more favorable than Valhi.
Volatility and Risk
Valhi has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500. Comparatively, REX American Resources has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500.
REX American Resources beats Valhi on 9 of the 13 factors compared between the two stocks.
Valhi, Inc. engages in the chemicals, component products, and real estate management and development businesses in the Asia Pacific, Europe, North America, 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 Contran Corporation.
About REX American Resources
REX American Resources Corporation, together with its subsidiaries, produces and sells ethanol in the United States. The company also offers corn, distillers grains, non-food grade corn oil, gasoline, and natural gas. In addition, it provides dry distillers grains with solubles, which is used as a protein in animal feed. The company was formerly known as REX Stores Corporation and changed its name to REX American Resources Corporation in 2010. REX American Resources Corporation was founded in 1980 and is headquartered in Dayton, Ohio.
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