Head to Head Analysis: Praxair (PX) and Kronos Worldwide (KRO)

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

Analyst Ratings

This is a breakdown of recent recommendations for Praxair and Kronos Worldwide, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Praxair 0 4 9 0 2.69
Kronos Worldwide 1 1 1 0 2.00

Praxair presently has a consensus target price of $174.36, indicating a potential upside of 7.55%. Kronos Worldwide has a consensus target price of $25.33, indicating a potential upside of 2.77%. Given Praxair’s stronger consensus rating and higher possible upside, equities analysts plainly believe Praxair is more favorable than Kronos Worldwide.

Profitability

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

Net Margins Return on Equity Return on Assets
Praxair 11.27% 26.91% 8.73%
Kronos Worldwide 21.70% 38.70% 16.18%

Dividends

Praxair pays an annual dividend of $3.30 per share and has a dividend yield of 2.0%. Kronos Worldwide pays an annual dividend of $0.68 per share and has a dividend yield of 2.8%. Praxair pays out 56.4% of its earnings in the form of a dividend. Kronos Worldwide pays out 36.2% 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. Praxair has increased its dividend for 13 consecutive years. Kronos Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Praxair has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, Kronos Worldwide has a beta of 2.39, suggesting that its share price is 139% more volatile than the S&P 500.

Earnings and Valuation

This table compares Praxair and Kronos Worldwide’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Praxair $11.44 billion 4.07 $1.25 billion $5.85 27.71
Kronos Worldwide $1.73 billion 1.65 $354.50 million $1.88 13.11

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

Institutional & Insider Ownership

85.7% of Praxair shares are held by institutional investors. Comparatively, 17.3% of Kronos Worldwide shares are held by institutional investors. 0.2% of Praxair shares are held by insiders. Comparatively, 0.1% of Kronos Worldwide shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Praxair beats Kronos Worldwide on 11 of the 17 factors compared between the two stocks.

About Praxair

Praxair, Inc. produces and distributes industrial gases. It operates through five segments: North America, Europe, South America, Asia, and Surface Technologies. The company offers atmospheric gases, including oxygen, nitrogen, argon, and rare gases; and process gases, such as carbon dioxide, helium, hydrogen, electronic gases, specialty gases, and acetylene. It also supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders to the aircraft, energy, printing, primary metals, petrochemical, textile, and other industries. In addition, the company offers electric arc, plasma and wire spray, and high-velocity oxy-fuel equipment; and distributes hardgoods and welding equipment purchased from independent manufacturers. It serves various industries, such as healthcare, petroleum refining, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals, and water treatment. Praxair, Inc. was founded in 1907 and is headquartered in Danbury, Connecticut.

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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