Brenntag (OTCMKTS:BNTGY) vs. Valhi (NYSE:VHI) Head-To-Head Comparison

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

Dividends

Brenntag pays an annual dividend of $0.27 per share and has a dividend yield of 2.2%. Valhi pays an annual dividend of $0.32 per share and has a dividend yield of 2.3%. Brenntag pays out 42.2% of its earnings in the form of a dividend. Valhi pays out 50.0% 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.

Analyst Ratings

This is a breakdown of current ratings and price targets for Brenntag and Valhi, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brenntag	3	6	0	0	1.67
Valhi	2	0	0	0	1.00

Brenntag presently has a consensus target price of $12.80, indicating a potential upside of 5.09%. Valhi has a consensus target price of $12.00, indicating a potential downside of 15.07%. Given Brenntag’s stronger consensus rating and higher possible upside, research analysts plainly believe Brenntag is more favorable than Valhi.

Insider & Institutional Ownership

3.8% of Valhi shares are held by institutional investors. 0.2% of Valhi 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.

Earnings & Valuation

This table compares Brenntag and Valhi”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brenntag	$17.57 billion	0.50	$580.22 million	$0.64	19.03
Valhi	$2.10 billion	0.19	$108.00 million	$0.64	22.08

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

Volatility & Risk

Brenntag has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Valhi has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Brenntag	2.66%	9.14%	3.69%
Valhi	0.89%	2.22%	1.13%

Summary

Brenntag beats Valhi on 9 of the 14 factors compared between the two stocks.

About Brenntag

Brenntag SE purchases and supplies various industrial and specialty chemicals, and ingredients in Germany, Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates in two segments, Brenntag Essentials and Brenntag Specialties. It provides just-in-time delivery, product mixing, blending, repackaging, inventory management, and drum return handling. The company serves customers in various end-market industries, including nutrition, pharma, personal care, water treatment, and lubricants; and home, industrial, and institutional markets, as well as coatings and constructions, polymers, and rubber industries. The company was founded in 1874 and is based in Essen, Germany.

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.