FUCHS (OTCMKTS:FUPBY) versus NL Industries (NYSE:NL) Critical Review

FUCHS (OTCMKTS:FUPBY) and NL Industries (NYSE:NL) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Institutional & Insider Ownership

10.7% of NL Industries shares are owned by institutional investors. 0.3% of NL Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

FUCHS has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, NL Industries has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FUCHS	$4.03 billion	1.45	$346.21 million	$0.70	15.88
NL Industries	$158.30 million	1.83	-$37.83 million	($0.69)	-8.61

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

Dividends

FUCHS pays an annual dividend of $0.20 per share and has a dividend yield of 1.8%. NL Industries pays an annual dividend of $0.40 per share and has a dividend yield of 6.7%. FUCHS pays out 28.6% of its earnings in the form of a dividend. NL Industries pays out -58.0% 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 raised its dividend for 2 consecutive years. NL Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for FUCHS and NL Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FUCHS	1	0	1	1	2.67
NL Industries	0	1	0	0	2.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FUCHS	8.91%	16.57%	12.01%
NL Industries	-21.56%	-8.74%	-7.02%

Summary

FUCHS beats NL Industries on 11 of the 17 factors compared between the two stocks.

About FUCHS

Fuchs SE develops, produces, and sells lubricants and related specialties in Europe, the Middle East, Africa, the Asia Pacific, and North and South America. The company offers automotive lubricants, such as biodegradable lubricants, central and mobile hydraulic oils, dry coatings, engine and gear oils, motorcycle/two wheelers, and service fluids, as well as various oils for agriculture sector. It also provides industrial lubricants, including chain lubricants, dry coatings, gear and hydraulic oils, machine oils, open gear lubricants, rapidly biodegradable lubricants, compressor and refrigeration oils, release agents, slideways oils, fluids and industrial oils, textile machine oils, and turbine oils. In addition, the company offers lubricating greases comprising assembly pastes, biodegradable greases, food grade greases, multi-purpose/long-life greases, pastes for extreme temperatures, perfluorinated pastes, and wheel bearing greases, as well as gear boxes, and greases for central lubricating system, extreme temperature, machine tools, plain and roller bearings, rail vehicles, spray cans or rattle cans, and solid lubricants. Further, it provides metal processing lubricants consisting of cleaners, corrosion preventives, cutting and grinding, forming lubricants, and quenching oils; and special application lubricants for application equipment, chain lubrication, dry coatings, food and beverage, gears, sugar processing, railway traffic, plain and roller bearings, glass manufacturing process, hot forming, maintenance, open gears, pastes, release agents, other specialties, special greases, and wind power plants. Additionally, the company offers open gear and surface coating services. The company was formerly known as Fuchs Petrolub SE and changed its name to Fuchs SE in July 2023. Fuchs SE was founded in 1931 and is headquartered in Mannheim, Germany.

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.