NL Industries (NYSE:NL) and Hawkins (NASDAQ:HWKN) Head-To-Head Review

NL Industries (NYSE:NL) and Hawkins (NASDAQ:HWKN) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

This table compares NL Industries and Hawkins’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NL Industries	-23.88%	-9.43%	-7.53%
Hawkins	7.75%	16.85%	8.93%

Insider & Institutional Ownership

10.7% of NL Industries shares are owned by institutional investors. Comparatively, 69.7% of Hawkins shares are owned by institutional investors. 0.3% of NL Industries shares are owned by insiders. Comparatively, 4.1% of Hawkins shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

NL Industries pays an annual dividend of $0.40 per share and has a dividend yield of 6.9%. Hawkins pays an annual dividend of $0.76 per share and has a dividend yield of 0.5%. NL Industries pays out -51.9% of its earnings in the form of a dividend. Hawkins pays out 19.2% 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. NL Industries has increased its dividend for 2 consecutive years and Hawkins has increased its dividend for 20 consecutive years. NL Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

NL Industries has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500. Comparatively, Hawkins has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for NL Industries and Hawkins, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NL Industries	1	0	0	0	1.00
Hawkins	0	3	1	0	2.25

Hawkins has a consensus target price of $200.00, suggesting a potential upside of 35.60%. Given Hawkins’ stronger consensus rating and higher possible upside, analysts clearly believe Hawkins is more favorable than NL Industries.

Earnings & Valuation

This table compares NL Industries and Hawkins”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NL Industries	$158.30 million	1.79	-$37.83 million	($0.77)	-7.53
Hawkins	$974.43 million	3.16	$84.35 million	$3.95	37.34

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

Summary

Hawkins beats NL Industries on 15 of the 17 factors compared between the two stocks.

About NL Industries

NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in Europe, North America, the Asia Pacific, and internationally. The company manufactures and sells mechanical and electronic cabinet locks and other locking mechanisms, including disc tumbler locks; pin tumbler locking mechanisms under KeSet, System 64, TuBar, and Turbine brands; and electronic locks under CompX eLock and StealthLock brands for use in various applications, such as mailboxes, ignition systems, file cabinets, desk drawers, tool storage cabinets, high security medical cabinetry, integrated inventory and access control secured narcotics boxes, electronic circuit panels, storage compartments, gas station security, vending and cash containment machines. It also offers original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers, and other exhaust components; gauges, such as GPS speedometers and tachometers; mechanical and electronic controls and throttles; wake enhancement devices, trim tabs, steering wheels, and other billet aluminum accessories; dash panels, LED indicators, wire harnesses, and other accessories; and grab handles, pin cleats, and other accessories; primarily for performance and ski/wakeboard and performance boats. In addition, the company produces and markets value-added titanium dioxide pigments, a base industrial product used in imparting whiteness, brightness, opacity, and durability to a diverse range of customer applications and end-use markets, including coatings, plastics, paper, inks, cosmetics, pharmaceuticals, and other industrial and consumer products. The company sells its component products directly to original equipment manufacturers, as well as through distributors. NL Industries, Inc. was founded in 1891 and is based in Dallas, Texas. NL Industries, Inc. operates as a subsidiary of Valhi, Inc.

About Hawkins

Hawkins, Inc. operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment offers industrial chemicals, products, and services to agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. This segment manufactures sodium hypochlorite and agricultural products, as well as various food-grade and pharmaceutical products, such as liquid phosphates, lactates, other blended products, and agricultural products; and receives, stores, and distributes various chemicals comprising liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia, and potassium hydroxide. It also repackages water treatment chemicals and bulk industrial chemicals; and performs custom blending of chemicals. The Water Treatment segment provides chemicals, products, equipment, services, and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water, and agriculture water. The Health and Nutrition segment offers ingredient distribution, processing, and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products. Its products portfolio includes minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners, and enzymes. Hawkins, Inc. was founded in 1938 and is headquartered in Roseville, Minnesota.