Kronos Worldwide (NYSE:KRO) versus Northern Technologies International (NASDAQ:NTIC) Critical Comparison

Northern Technologies International (NASDAQ:NTIC) and Kronos Worldwide (NYSE:KRO) are both small-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitability.

Institutional & Insider Ownership

32.9% of Northern Technologies International shares are held by institutional investors. Comparatively, 15.1% of Kronos Worldwide shares are held by institutional investors. 24.3% of Northern Technologies International shares are held by insiders. Comparatively, 0.1% of Kronos Worldwide shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Northern Technologies International and Kronos Worldwide”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northern Technologies International	$85.06 million	0.88	$5.41 million	$0.30	26.33
Kronos Worldwide	$1.89 billion	0.38	$86.20 million	$0.58	10.84

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Northern Technologies International	3.46%	3.38%	2.66%
Kronos Worldwide	3.57%	8.04%	3.50%

Volatility & Risk

Northern Technologies International has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500. Comparatively, Kronos Worldwide has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Northern Technologies International and Kronos Worldwide, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northern Technologies International	0	0	0	0	0.00
Kronos Worldwide	2	0	0	0	1.00

Kronos Worldwide has a consensus price target of $7.75, indicating a potential upside of 23.31%. Given Kronos Worldwide’s stronger consensus rating and higher possible upside, analysts plainly believe Kronos Worldwide is more favorable than Northern Technologies International.

Dividends

Northern Technologies International pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Kronos Worldwide pays an annual dividend of $0.20 per share and has a dividend yield of 3.2%. Northern Technologies International pays out 13.3% 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.

Summary

Kronos Worldwide beats Northern Technologies International on 10 of the 15 factors compared between the two stocks.

About Northern Technologies International

Northern Technologies International Corporation develops and markets rust and corrosion inhibiting solutions in North America, South America, Europe, Asia, the Middle East and internationally. It offers rust and corrosion inhibiting products, such as plastic and paper packaging, liquids, coatings, rust removers, cleaners, diffusers, and engineered solutions designed for the oil and gas industry under the ZERUST brand. The company provides a portfolio of bio-based and certified compostable polymer resin compounds and finished products under the Natur-Tec brand. In addition, it offers on-site and technical consulting for rust and corrosion prevention issues. It sells its products and services to automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets through direct sales force, network of independent distributors, agents, manufacturer's sales representatives, and strategic partners. The company was founded in 1970 and is headquartered in Circle Pines, Minnesota.

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.