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What Makes Kronos Worldwide (KRO) Stock a Solid Choice Right Now

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Kronos Worldwide, Inc.’s (KRO - Free Report) stock looks promising at the moment. The company’s shares have popped 19.3% over the past three months, outperforming its industry’s rise of 5.5% over the same time frame. It is benefiting from higher demand and selling prices of titanium dioxide (TiO2).

We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.

 

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Kronos Worldwide has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors.

Let’s take a look into the factors that make Kronos Worldwide an attractive choice for investors right now.

Estimates Northbound

Earnings estimate revisions have the greatest impact on stock prices. Over the past two months, the Zacks Consensus Estimate for Kronos Worldwide for 2022 has increased around 28.9%. The consensus estimate for fourth-quarter 2021 has also been revised 35% upward over the same time frame.

Healthy Growth Prospects

The Zacks Consensus Estimate for earnings for 2022 for Kronos Worldwide is currently pegged at $1.25, reflecting an expected year-over-year growth of 28.9%. Moreover, earnings are expected to register a 200% growth in the fourth quarter.

Attractive Valuation

Valuation looks attractive as Kronos Worldwide’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.

Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, Kronos Worldwide is currently trading at trailing 12-month EV/EBITDA multiple of 8.96, cheaper compared with the industry average of 9.32.

Upbeat Prospects

Kronos Worldwide is poised to benefit from higher demand for TiO2. The company sees demand to grow 2-3% annually over the long term. Higher demand in European and North American markets are likely to drive its TiO2 sales volumes. New product development, a solid customer base and effective marketing strategies are also working in the company’s favor.

The company, in its third-quarter call, said that it expects global demand for consumer products to remain strong, positively impacting sales and production volumes. It anticipates its sales and income from operations for full-year 2021 to be higher on a year-over-year basis.

Kronos Worldwide is also benefiting from an uptick in selling prices as witnessed in the third quarter. Its average TiO2 selling prices rose 11% on a year-over-year basis in the quarter. The company is expected to continue to benefit from higher TiO2 selling prices in the fourth quarter of 2021 on strong consumer demand.

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Commercial Metals Company (CMC - Free Report) , Albemarle Corporation (ALB - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
 
Commercial Metals, sporting a Zacks Rank #1, has a projected earnings growth rate of 10.5% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 6.6% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 7.4%, on average. CMC has rallied around 78% in a year.

Albemarle, carrying a Zacks Rank #1, has an expected earnings growth rate of 51.3% for the current year. ALB's consensus estimate for the current year has been revised 5.4% upward over the past 60 days.

Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB shares have gained around 26% in a year.

AdvanSix, carrying a Zacks Rank #2, has an expected earnings growth rate of 3.9% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 2% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 103% in a year.