Valhi (NYSE:VHI) versus Enlightify (NYSE:ENFY) Critical Contrast

Enlightify (NYSE:ENFY) and Valhi (NYSE:VHI) are both small-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Enlightify and Valhi, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enlightify	1	0	0	0	1.00
Valhi	1	1	0	0	1.50

Valhi has a consensus price target of $12.00, suggesting a potential downside of 13.21%. Given Valhi’s stronger consensus rating and higher possible upside, analysts plainly believe Valhi is more favorable than Enlightify.

Profitability

This table compares Enlightify and Valhi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enlightify	-22.98%	-18.78%	-11.03%
Valhi	4.69%	7.02%	3.53%

Volatility & Risk

Enlightify has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Valhi has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Insider & Institutional Ownership

0.1% of Enlightify shares are owned by institutional investors. Comparatively, 3.8% of Valhi shares are owned by institutional investors. 14.0% of Enlightify shares are owned by company insiders. Comparatively, 0.2% of Valhi shares are owned 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.

Earnings & Valuation

This table compares Enlightify and Valhi”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enlightify	$79.21 million	0.02	-$28.41 million	($1.05)	-0.08
Valhi	$2.09 billion	0.19	$108.00 million	$3.43	4.03

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

Summary

Valhi beats Enlightify on 12 of the 13 factors compared between the two stocks.

About Enlightify

Enlightify, Inc. engages in the research, development, production, and sale of various types of fertilizers and agricultural products. It operates through the following segments: Jinong, Gufeng, and Yuxing. The Jinong segment includes fertilizer products, with focus on humic acid-based compound fertilizer. The Gufeng segment refers to the compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizers, highly concentrated water-soluble fertilizers, and mixed organic-inorganic compound fertilizer. The Yuxing segment develops and produces agricultural products, such as top-grade fruits, vegetables, flowers, and colored seedlings. The company was founded by Tao Li on February 6, 1987 and is headquartered in Xi’an, China.

About Valhi

Valhi, Inc. engages in the chemicals, component products, and real estate management and development businesses in Europe, North America, the Asia Pacific, 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 Dixie Rice Agricultural L.L.C.