Critical Comparison: Kronos Worldwide (NYSE:KRO) vs. Cereplast (OTCMKTS:CERPQ)

Cereplast (OTCMKTS:CERPQ) and Kronos Worldwide (NYSE:KRO) are both small-cap materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Cereplast and Kronos Worldwide, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cereplast	0	0	0	0	0.00
Kronos Worldwide	2	0	0	1	2.00

Kronos Worldwide has a consensus price target of $5.00, indicating a potential downside of 41.49%. Given Cereplast’s higher probable upside, equities research analysts plainly believe Cereplast is more favorable than Kronos Worldwide.

Volatility and Risk

Cereplast has a beta of 3.04, indicating that its share price is 204% more volatile than the S&P 500. Comparatively, Kronos Worldwide has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cereplast	N/A	N/A	N/A	N/A	N/A
Kronos Worldwide	$1.86 billion	0.53	-$110.90 million	($0.95)	-9.00

Cereplast has higher earnings, but lower revenue than Kronos Worldwide.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cereplast	N/A	N/A	N/A
Kronos Worldwide	-5.63%	-12.28%	-5.16%

Institutional & Insider Ownership

15.1% of Kronos Worldwide shares are held by institutional investors. 1.1% of Cereplast shares are held by insiders. Comparatively, 0.2% of Kronos Worldwide shares are held by 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.

Summary

Cereplast beats Kronos Worldwide on 6 of the 10 factors compared between the two stocks.

About Cereplast

Cereplast, Inc. does not have significant operation. Previously, it was involved in the development and are commercialization of bio-based resins. The company was incorporated in 2001 and is based in Zhengzhou, China.

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.