Head-To-Head Review: Celanese (NYSE:CE) vs. NL Industries (NYSE:NL)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Celanese	-12.15%	8.75%	1.94%
NL Industries	-23.88%	-9.43%	-7.53%

Volatility and Risk

Celanese has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, NL Industries has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Celanese	$9.54 billion	0.73	-$1.17 billion	($10.60)	-5.99
NL Industries	$158.30 million	1.76	-$37.83 million	($0.77)	-7.39

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

Insider and Institutional Ownership

98.9% of Celanese shares are held by institutional investors. Comparatively, 10.7% of NL Industries shares are held by institutional investors. 0.3% of Celanese shares are held by insiders. Comparatively, 0.3% of NL Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Celanese	3	8	9	0	2.30
NL Industries	1	0	0	0	1.00

Celanese currently has a consensus price target of $61.39, suggesting a potential downside of 3.29%. Given Celanese’s stronger consensus rating and higher probable upside, equities analysts plainly believe Celanese is more favorable than NL Industries.

Dividends

Celanese pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. NL Industries pays an annual dividend of $0.40 per share and has a dividend yield of 7.0%. Celanese pays out -1.1% of its earnings in the form of a dividend. NL Industries pays out -51.9% 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. 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.

Summary

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

About Celanese

Celanese Corporation, a chemical and specialty materials company, manufactures and sells high performance engineered polymers in the United States and internationally. It operates through Engineered Materials and Acetyl Chain. The Engineered Materials segment develops, produces, and supplies specialty polymers for automotive and medical applications, as well as for use in industrial products and consumer electronics. The Acetyl Chain segment produces and supplies acetyl products, including acetic acid, vinyl acetate monomers, acetic anhydride, and acetate esters that are used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals; and organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. It also offers vinyl acetate-based emulsions for use in paints and coatings, adhesives, construction, glass fiber, textiles, and paper applications; and ethylene vinyl acetate resins and compounds, as well as low-density polyethylene for use in flexible packaging films, lamination film products, hot melt adhesives, automotive parts, and carpeting applications. In addition, it provides redispersible powders (RDP) for use in construction applications, including flooring, plasters, insulation, tiling, and waterproofing. Celanese Corporation was founded in 1918 and is headquartered in Irving, Texas.

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.