Reviewing Brenntag (OTCMKTS:BNTGY) & Kronos Worldwide (NYSE:KRO)

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

Analyst Ratings

This is a summary of recent ratings for Brenntag and Kronos Worldwide, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brenntag	1	4	0	0	1.80
Kronos Worldwide	2	0	0	0	1.00

Kronos Worldwide has a consensus price target of $7.75, indicating a potential upside of 28.52%. Given Kronos Worldwide’s higher possible upside, analysts plainly believe Kronos Worldwide is more favorable than Brenntag.

Valuation and Earnings

This table compares Brenntag and Kronos Worldwide”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brenntag	$17.57 billion	0.53	$580.22 million	$0.79	16.29
Kronos Worldwide	$1.89 billion	0.37	$86.20 million	$0.58	10.40

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

Risk & Volatility

Brenntag has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Kronos Worldwide has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Institutional and Insider Ownership

15.1% of Kronos Worldwide shares are owned by institutional investors. 0.1% of Kronos Worldwide shares are owned by 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

Brenntag pays an annual dividend of $0.27 per share and has a dividend yield of 2.1%. Kronos Worldwide pays an annual dividend of $0.20 per share and has a dividend yield of 3.3%. Brenntag pays out 34.2% of its earnings in the form of a dividend. Kronos Worldwide pays out 34.5% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Brenntag	3.24%	11.47%	4.59%
Kronos Worldwide	3.57%	8.04%	3.50%

Summary

Brenntag beats Kronos Worldwide on 9 of the 15 factors compared between the two stocks.

About Brenntag

Brenntag SE purchases and supplies various industrial and specialty chemicals, and ingredients in Germany, Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates in two segments, Brenntag Essentials and Brenntag Specialties. It provides just-in-time delivery, product mixing, blending, repackaging, inventory management, and drum return handling. The company serves customers in various end-market industries, including nutrition, pharma, personal care, water treatment, and lubricants; and home, industrial, and institutional markets, as well as coatings and constructions, polymers, and rubber industries. The company was founded in 1874 and is based in Essen, 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.