Hydrogenics (HYGS) and Kronos Worldwide (NYSE:KRO) Critical Analysis

Kronos Worldwide (NYSE: KRO) and Hydrogenics (NASDAQ:HYGS) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.

Risk & Volatility

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Kronos Worldwide has a beta of 2.37, meaning that its share price is 137% more volatile than the S&P 500. Comparatively, Hydrogenics has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Insider & Institutional Ownership

16.9% of Kronos Worldwide shares are held by institutional investors. Comparatively, 24.7% of Hydrogenics shares are held by institutional investors. 0.1% of Kronos Worldwide shares are held by company insiders. Comparatively, 26.1% of Hydrogenics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Kronos Worldwide and Hydrogenics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kronos Worldwide $1.73 billion 1.66 $354.50 million $1.88 13.18
Hydrogenics $48.05 million 2.86 -$11.14 million ($0.80) -11.13

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

Dividends

Kronos Worldwide pays an annual dividend of $0.68 per share and has a dividend yield of 2.7%. Hydrogenics does not pay a dividend. Kronos Worldwide pays out 36.2% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Kronos Worldwide 20.50% 39.34% 15.75%
Hydrogenics -23.18% -57.54% -16.96%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Kronos Worldwide and Hydrogenics, as provided by MarketBeat.com.

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

Kronos Worldwide currently has a consensus price target of $24.00, suggesting a potential downside of 3.11%. Hydrogenics has a consensus price target of $10.00, suggesting a potential upside of 12.36%. Given Hydrogenics’ stronger consensus rating and higher probable upside, analysts clearly believe Hydrogenics is more favorable than Kronos Worldwide.

Summary

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

Kronos Worldwide Company Profile

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.

Hydrogenics Company Profile

Hydrogenics Corp. designs, develops and manufactures hydrogen generation and fuel cell products based on water electrolysis technology and proton exchange membrane technology. It operates through two segments: OnSite Generation and Power Systems. The OnSite Generation segment is based on water electrolysis technology which involves the decomposition of water into oxygen and hydrogen gas by passing an electric current through a liquid electrolyte and a polymer electrolyte membrane. The Power Systems segment is based on proton exchange membrane fuel cell technology, which transforms chemical energy liberated during the electrochemical reaction of hydrogen and oxygen into electrical energy. The company was founded on June 10, 2009 and is headquartered in Mississauga, Canada.

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