Valhi (NYSE:VHI) & Johnson Matthey (OTCMKTS:JMPLY) Financial Analysis

Johnson Matthey (OTCMKTS:JMPLY) and Valhi (NYSE:VHI) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Dividends

Johnson Matthey pays an annual dividend of $1.16 per share and has a dividend yield of 2.3%. Valhi pays an annual dividend of $0.32 per share and has a dividend yield of 2.3%. Valhi pays out -15.8% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Johnson Matthey and Valhi, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Johnson Matthey	0	3	1	2	2.83
Valhi	2	0	0	0	1.00

Valhi has a consensus target price of $12.00, indicating a potential downside of 14.01%. Given Valhi’s higher probable upside, analysts clearly believe Valhi is more favorable than Johnson Matthey.

Insider and Institutional Ownership

3.8% of Valhi shares are owned by institutional investors. 0.2% of Valhi shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Johnson Matthey has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, Valhi has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Johnson Matthey	N/A	N/A	N/A
Valhi	-2.77%	-3.20%	-1.65%

Valuation and Earnings

This table compares Johnson Matthey and Valhi”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Johnson Matthey	$14.89 billion	0.28	$475.91 million	N/A	N/A
Valhi	$2.08 billion	0.19	-$57.60 million	($2.02)	-6.91

Johnson Matthey has higher revenue and earnings than Valhi.

Summary

Johnson Matthey beats Valhi on 10 of the 15 factors compared between the two stocks.

About Johnson Matthey

Johnson Matthey is a global leader in science that enables a cleaner and healthier world. With over 200 years of sustained commitment to innovation and technological breakthroughs, they improve the function, performance and safety of their customers’ products. Their science has a global impact in areas such as low emission transport, pharmaceuticals, chemical processing and making the most efficient use of the planet’s natural resources. Today more than 13,000 Johnson Matthey professionals collaborate with their network of customers and partners to make a real difference to the world around us.

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.