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Kronos Worldwide's (KRO) Shares Up 26% in 6 Months: Here's Why

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Kronos Worldwide, Inc.’s (KRO - Free Report) shares have gained 26.1% over the past six months. The company, carrying a Zacks Rank #3 (Hold), has outperformed its industry’s rise of 2.8% over the same time frame. It has also topped the S&P 500’s roughly 2.5% rise over the same period.

Let’s take a look into the factors that are driving this leading producer and marketer of titanium dioxide (TiO2).

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What’s Going in KRO’s Favor?

Better-than-expected earnings performance in the fourth quarter and upbeat prospects have contributed to the rally in the company's shares. Kronos Worldwide’s earnings of 28 cents per share for fourth-quarter 2021 rose from 9 cents in the year-ago quarter. The figure beat the Zacks Consensus Estimate of 27 cents per share. The bottom line was driven by higher income from operations resulting from increased average TiO2 selling prices.

Net sales rose around 20% year over year to $496 million, driven by higher average TiO2 selling prices. It surpassed the Zacks Consensus Estimate of $489.7 million.

The company, on its fourth-quarter call, said that it expects global demand for consumer products to remain strong throughout 2022. TiO2 selling prices are projected to increase this year as a result of higher costs and strong demand. Kronos Worldwide also expects its sales and income from operations for 2022 to be higher on a year-over-year basis.

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 is also gaining from an uptick in selling prices. Its average TiO2 selling prices rose 17% on a year-over-year basis in the fourth quarter. The company is expected to continue to benefit from higher TiO2 selling prices in the first quarter of 2022 on strong consumer demand.

Stocks to Consider

Some better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .

Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 100.5% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 36.5% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien 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 60.3%, on average. NTR has rallied around 93% in a year.

AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 64.9% for the current year. ASIX's consensus estimate for current-year earnings has been revised 58% 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 112% in a year.

Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 82.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 62.8% upward over the past 60 days.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 13.1%, on average. CMC has gained around 51% in a year.

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