Ingevity (NYSE:NGVT) versus NL Industries (NYSE:NL) Financial Analysis

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

Valuation & Earnings

This table compares Ingevity and NL Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ingevity	$1.18 billion	2.01	-$167.10 million	($3.55)	-19.19
NL Industries	$158.30 million	1.87	-$37.83 million	($0.69)	-8.77

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

Insider and Institutional Ownership

91.6% of Ingevity shares are held by institutional investors. Comparatively, 10.7% of NL Industries shares are held by institutional investors. 0.9% of Ingevity shares are held by company insiders. Comparatively, 0.3% of NL Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ingevity	-10.55%	207.82%	9.70%
NL Industries	-21.56%	-8.74%	-7.02%

Analyst Ratings

This is a summary of recent ratings and price targets for Ingevity and NL Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ingevity	1	2	2	0	2.20
NL Industries	0	1	0	0	2.00

Ingevity presently has a consensus target price of $80.00, suggesting a potential upside of 17.41%. Given Ingevity’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ingevity is more favorable than NL Industries.

Risk & Volatility

Ingevity has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, NL Industries has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500.

Summary

Ingevity beats NL Industries on 11 of the 14 factors compared between the two stocks.

About Ingevity

Ingevity Corporation manufactures and sells activated carbon products, derivative specialty chemicals, and engineered polymers in North America, the Asia Pacific, Europe, the Middle East, Africa, and South America. It operates through three segments: Performance Materials, Performance Chemicals, and Advanced Polymer Technologies. The Performance Materials segment engineers, manufactures, and sells hardwood-based and chemically activated carbon products for use in gasoline vapor emission control systems in cars, motorcycles, trucks, and boats. This segment also produces other activated carbon products for food, water, beverage, and chemical purification applications. The Performance Chemicals segment consists of road technologies and industrial specialties. This segment's products are used in pavement construction, pavement preservation, pavement reconstruction and recycling, road markings, agrochemical dispersants, paper chemicals, and other industrial uses. The Advanced Polymer Technologies segment produces caprolactone and caprolactone-based specialty polymers for use in coatings, resins, elastomers, adhesives, bioplastics, and medical devices. It serves automotive parts and components manufacturers through sales representatives and distributors. The company was formerly known as WestRock Company, Specialty Chemicals Business and changed its name to Ingevity Corporation in September 2015. Ingevity Corporation was founded in 1964 and is headquartered in North Charleston, South Carolina.

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.