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

Institutional & Insider Ownership

15.0% of OCI Partners shares are owned by institutional investors. Comparatively, 15.4% of Kronos Worldwide shares are owned by institutional investors. 0.1% of Kronos Worldwide shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

OCI Partners pays an annual dividend of $0.48 per share and has a dividend yield of 5.8%. Kronos Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. OCI Partners pays out -252.6% of its earnings in the form of a dividend. Kronos Worldwide pays out 24.9% 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. OCI Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

Net Margins Return on Equity Return on Assets
OCI Partners -5.60% -10.52% -2.53%
Kronos Worldwide 18.57% 24.73% 9.09%

Volatility and Risk

OCI Partners has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, Kronos Worldwide has a beta of 2.11, suggesting that its stock price is 111% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for OCI Partners and Kronos Worldwide, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OCI Partners 1 0 0 0 1.00
Kronos Worldwide 1 1 0 0 1.50

OCI Partners currently has a consensus price target of $7.00, indicating a potential downside of 15.15%. Kronos Worldwide has a consensus price target of $17.00, indicating a potential downside of 19.92%. Given OCI Partners’ higher possible upside, research analysts plainly believe OCI Partners is more favorable than Kronos Worldwide.

Valuation and Earnings

This table compares OCI Partners and Kronos Worldwide’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
OCI Partners $298.87 million 2.40 $93.85 million ($0.19) -43.42
Kronos Worldwide $1.50 billion 1.64 $240.60 million $2.41 8.81

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

Summary

Kronos Worldwide beats OCI Partners on 10 of the 14 factors compared between the two stocks.

OCI Partners Company Profile

OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.

Kronos Worldwide Company Profile

Kronos Worldwide, Inc. (Kronos) is a producer and marketer of titanium dioxide (TiO2) pigments, a base industrial product that is used in a range of applications. The Company, along with its distributors and agents, sells and provides technical services for its products with sales in Europe and North America. It offers its customers a portfolio of products that include TiO2 pigment grades under the Kronos brand, which provides a range of performance properties. It offers its products to domestic and international paint, plastics, decorative laminate and paper manufacturers. It ships TiO2 to its customers in either a powder or slurry form through rail, truck or ocean carrier. It sells and provides technical services for its products in three end use markets, which include coatings, plastics and paper. It produces TiO2 in two crystalline forms, which include rutile and anatase. Rutile TiO2 is manufactured using both a chloride production process and a sulfate production process.

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