Head-To-Head Review: Tokuyama (OTCMKTS:TKYMY) vs. Kronos Worldwide (NYSE:KRO)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kronos Worldwide	-2.22%	-3.09%	-1.33%
Tokuyama	7.00%	9.54%	5.37%

Earnings and Valuation

This table compares Kronos Worldwide and Tokuyama”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kronos Worldwide	$1.89 billion	0.31	$86.20 million	($0.36)	-14.18
Tokuyama	$2.25 billion	0.83	$154.35 million	$1.11	11.68

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

Institutional & 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, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Kronos Worldwide and Tokuyama, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kronos Worldwide	4	0	0	0	1.00
Tokuyama	0	0	0	0	0.00

Kronos Worldwide presently has a consensus price target of $6.50, suggesting a potential upside of 27.33%. Given Kronos Worldwide’s stronger consensus rating and higher possible upside, research analysts clearly believe Kronos Worldwide is more favorable than Tokuyama.

Volatility & Risk

Kronos Worldwide has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Tokuyama has a beta of 0.15, meaning that its stock price is 85% less volatile than the S&P 500.

Dividends

Kronos Worldwide pays an annual dividend of $0.20 per share and has a dividend yield of 3.9%. Tokuyama pays an annual dividend of $0.26 per share and has a dividend yield of 2.0%. Kronos Worldwide pays out -55.6% of its earnings in the form of a dividend. Tokuyama pays out 23.4% 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. Kronos Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Tokuyama beats Kronos Worldwide on 8 of the 15 factors compared between the two stocks.

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.

About Tokuyama

Tokuyama Corporation produces and sells various chemical products in Japan. The company operates through six segments: Chemicals, Cement, Electronics and Advanced Materials, Life Science, Eco Business, and Others. The Chemicals segment offers caustic soda, soda ash, calcium chloride, sodium silicate cullet, sodium bicarbonate, purified, vinyl chloride monomer, polyvinyl chloride resin, propylene oxide, methylene chloride, and chloroform. The Cement segment provides cement, ready-mixed concrete, and cement-type stabilizer, as well as engages in the resource recycling business. The Electronic and Advanced Materials segment provides polycrystalline silicon; fumed silica and tetrachlorosilane; aluminum nitride; high-purity chemicals for electronics manufacturing and photoresist developer; and isopropyl alcohol. The Life Science segment provides medical diagnosis systems, dental materials and equipment, pharmaceutical ingredients and intermediates, plastic lens-related materials for glasses, and microporous film. The Eco Business segment offers plastic window sashes, ion exchange membranes, as well as engages in waste gypsum board recycling activity. The company was formerly known as Tokuyama Soda Co., Ltd. and changed its name to Tokuyama Corporation in April 1994. Tokuyama Corporation was incorporated in 1918 and is headquartered in Tokyo, Japan.