Kraton (KRA) and Kronos Worldwide (KRO) Head to Head Analysis

Kraton (NYSE: KRA) and Kronos Worldwide (NYSE:KRO) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Dividends

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Kronos Worldwide pays an annual dividend of $0.68 per share and has a dividend yield of 3.1%. Kraton does not pay a dividend. Kronos Worldwide pays out 36.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Kraton and Kronos Worldwide’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kraton $1.96 billion 0.78 $97.54 million $2.85 16.85
Kronos Worldwide $1.73 billion 1.49 $354.50 million $1.88 11.80

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

Analyst Recommendations

This is a summary of current recommendations for Kraton and Kronos Worldwide, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kraton 0 1 2 0 2.67
Kronos Worldwide 1 1 0 0 1.50

Kraton presently has a consensus price target of $65.50, indicating a potential upside of 36.37%. Kronos Worldwide has a consensus price target of $24.00, indicating a potential upside of 8.21%. Given Kraton’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Kraton is more favorable than Kronos Worldwide.

Institutional and Insider Ownership

96.0% of Kraton shares are held by institutional investors. Comparatively, 16.9% of Kronos Worldwide shares are held by institutional investors. 4.7% of Kraton shares are held by company insiders. Comparatively, 0.1% of Kronos Worldwide shares are held 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

Kraton has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Kronos Worldwide has a beta of 2.37, suggesting that its share price is 137% more volatile than the S&P 500.

Profitability

This table compares Kraton and Kronos Worldwide’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kraton 4.98% 15.47% 3.01%
Kronos Worldwide 20.50% 39.34% 15.75%

Summary

Kraton beats Kronos Worldwide on 9 of the 16 factors compared between the two stocks.

About Kraton

Kraton Corporation manufactures and sells styrenic block copolymers and other engineered polymers in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Polymer and Chemical. The Polymer segment offers performance products, including styrene-butadiene-styrene and styrene-isoprene-styrene; and specialty polymers, such as hydrogenated styrenic block copolymers, as well as isoprene rubber and isoprene rubber latex for use in medical and personal care products, adhesives, tackifiers, paints, and coatings. The Chemical segment provides pine-based specialty products that include rosin-based tackifiers for packaging and pressure-sensitive adhesive applications; terpene-based tackifiers for bookbinding, hygiene, and pressure-sensitive adhesive applications; alpha-methyl-styrene (AMS) resins for bookbinding and pressure-sensitive adhesive applications; and hot melt polyamides for flexible packaging. It also provides rosin-based binders for the thermoplastic pavement marking submarket; sells tall oil fatty acids for the asphalt paving market; and produces rosin esters and insoluble maleic-based tackifiers, as well as bitumen additives. In addition, this segment offers terpene-based tread enhancement resins and AMS-based tread enhancement additives, as well as distilled tall oil and rosins for enhancing the performance and manufacturing of high performance, winter, and all-season tires. Further, it provides dimer acids, tall oil rosins, and terpene fractions for fuel additive, oilfield chemical, mining fluid, coating, metalworking fluid and lubricant, and other applications. The company sells its products through various channels, including direct sales force, marketing representatives, and distributors under the Kraton and Cariflex brands. The company was formerly known as Kraton Performance Polymers, Inc. and changed its name to Kraton Corporation in September 2016. Kraton Corporation is based in Houston, Texas.

About Kronos Worldwide

Kronos Worldwide, Inc. produces and markets titanium dioxide pigments (TiO2) in Europe, North America, the Asia Pacific, and internationally. It produces TiO2 in two crystalline forms, rutile and anatase to impart whiteness, brightness, opacity, and durability for various products, such as paints, coatings, plastics, paper, fibers, and ceramics, as well as for various specialty products, such as inks, food, and cosmetics. The company also produces ilmenite, a raw material used directly as a feedstock by sulfate-process TiO2 plants; iron-based chemicals, which are used as treatment and conditioning agents for industrial effluents and municipal wastewater, as well as in the manufacture of iron pigments, cement, and agricultural products; titanium oxychloride for use in the formulation of pearlescent pigments, and production of electroceramic capacitors for cell phones and other electronic devices; and titanyl sulfate that is used in pearlescent pigments, natural gas pipe, and other specialty applications. In addition, it sells and provides technical services for its products. The company sells its products under the Kronos brand through distributors and agents to paint, plastics, decorative laminate, and paper manufacturers. The company is headquartered in Dallas, Texas. Kronos Worldwide, Inc. is a subsidiary of Valhi, Inc.

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