Head-To-Head Survey: RPM International (NYSE:RPM) vs. NL Industries (NYSE:NL)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
RPM International	9.16%	24.22%	9.46%
NL Industries	35.06%	12.93%	9.69%

Institutional & Insider Ownership

80.9% of RPM International shares are owned by institutional investors. Comparatively, 10.7% of NL Industries shares are owned by institutional investors. 1.6% of RPM International shares are owned by insiders. Comparatively, 0.3% of NL Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

RPM International has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, NL Industries has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500.

Dividends

RPM International pays an annual dividend of $2.16 per share and has a dividend yield of 2.0%. NL Industries pays an annual dividend of $0.36 per share and has a dividend yield of 6.3%. RPM International pays out 40.4% of its earnings in the form of a dividend. NL Industries pays out 32.7% 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. RPM International has increased its dividend for 51 consecutive years and NL Industries has increased its dividend for 2 consecutive years. NL Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and recommmendations for RPM International and NL Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RPM International	0	6	6	1	2.62
NL Industries	0	1	0	0	2.00

RPM International presently has a consensus price target of $130.70, suggesting a potential upside of 20.98%. Given RPM International’s stronger consensus rating and higher probable upside, equities research analysts clearly believe RPM International is more favorable than NL Industries.

Earnings & Valuation

This table compares RPM International and NL Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RPM International	$7.52 billion	1.84	$688.69 million	$5.35	20.19
NL Industries	$152.72 million	1.84	$67.23 million	$1.10	5.24

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

Summary

RPM International beats NL Industries on 13 of the 18 factors compared between the two stocks.

About RPM International

RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. It offers waterproofing, coating, and traditional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance services; sealing and bonding, subfloor preparation, flooring, and glazing solutions; resin flooring systems, polyurethane, MMA waterproof, epoxy floor paint and coatings, concrete repair, and protection products; fire stopping and intumescent steel coating, and manufacturing industry solutions; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; insulated building cladding materials; and concrete form wall systems. It also provides polymer flooring systems; fiberglass reinforced plastic gratings and shapes; corrosion-control coating, containment and railcar lining, fire and sound proofing, and heat and cryogenic insulation products; specialty construction products; amine curing agents, reactive diluents, and epoxy resins; fluorescent colorants and pigments; shellac-based-specialty and marine coatings; fire and water damage restoration, carpet cleaning, and disinfecting products; fuel additives; wood treatments, coatings, and touch-up products; and nail enamels, polishes, and coating components. In addition, it offers solutions for the paint contractors and DIYers, concrete restoration and flooring, metallic and faux finish coatings, cleaners, and hobby paints and cements; and caulks, adhesives, insulating foams, and patches, as well as spackling, glazing, and repair products. The company was incorporated in 1947 and is headquartered in Medina, Ohio.

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.