Analyzing Kronos Worldwide (KRO) and Rayonier Advanced Materials (RYAM)

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

Dividends

Kronos Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. Kronos Worldwide pays out 21.0% of its earnings in the form of a dividend. Rayonier Advanced Materials pays out 43.8% 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. Kronos Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Kronos Worldwide and Rayonier Advanced Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kronos Worldwide 20.52% 31.38% 12.00%
Rayonier Advanced Materials 4.98% 18.12% 2.79%

Risk & Volatility

Kronos Worldwide has a beta of 2.18, indicating that its share price is 118% more volatile than the S&P 500. Comparatively, Rayonier Advanced Materials has a beta of 4.41, indicating that its share price is 341% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Kronos Worldwide and Rayonier Advanced Materials, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kronos Worldwide 1 2 0 0 1.67
Rayonier Advanced Materials 0 0 5 0 3.00

Kronos Worldwide currently has a consensus target price of $24.00, indicating a potential downside of 7.66%. Rayonier Advanced Materials has a consensus target price of $19.20, indicating a potential downside of 3.86%. Given Rayonier Advanced Materials’ stronger consensus rating and higher possible upside, analysts plainly believe Rayonier Advanced Materials is more favorable than Kronos Worldwide.

Earnings & Valuation

This table compares Kronos Worldwide and Rayonier Advanced Materials’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kronos Worldwide $1.36 billion 2.21 $43.30 million $2.86 9.09
Rayonier Advanced Materials $869.00 million 0.99 $73.28 million $0.64 31.20

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

Institutional & Insider Ownership

16.2% of Kronos Worldwide shares are held by institutional investors. Comparatively, 95.2% of Rayonier Advanced Materials shares are held by institutional investors. 0.1% of Kronos Worldwide shares are held by insiders. Comparatively, 2.1% of Rayonier Advanced Materials shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

About Kronos Worldwide

Kronos Worldwide, Inc. (Kronos) is a producer and marketer of titanium dioxide (TiO2) pigments, a base industrial product that is used in a range of applications. The Company, along with its distributors and agents, sells and provides technical services for its products with sales in Europe and North America. It offers its customers a portfolio of products that include TiO2 pigment grades under the Kronos brand, which provides a range of performance properties. It offers its products to domestic and international paint, plastics, decorative laminate and paper manufacturers. It ships TiO2 to its customers in either a powder or slurry form through rail, truck or ocean carrier. It sells and provides technical services for its products in three end use markets, which include coatings, plastics and paper. It produces TiO2 in two crystalline forms, which include rutile and anatase. Rutile TiO2 is manufactured using both a chloride production process and a sulfate production process.

About Rayonier Advanced Materials

Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company’s product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company’s products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company’s production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.

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