Nl Industries Inc

NL

Industrial Inorganic Chemicals

Mkt Cap

$350.1M

PE

31.13

Debt

Cash

$138.3M

EV

FCF

$35.3M

Market Cap

$350.1M

P/E Ratio

31.13

Debt

Cash

$138.3M

EV

FCF

$35.3M

Charts data: {"Earnings":[{"time":"2014-12-30","value":28499000},{"time":"2015-12-30","value":-23909000},{"time":"2016-12-30","value":15325000},{"time":"2017-12-30","value":116100000},{"time":"2018-12-30","value":-41017000},{"time":"2019-12-30","value":25844000},{"time":"2020-12-30","value":14680000},{"time":"2021-12-30","value":51188000},{"time":"2022-12-30","value":33844000},{"time":"2023-12-30","value":-2308000}],"Sales":[{"time":"2014-12-30","value":103846000},{"time":"2015-12-30","value":108994000},{"time":"2016-12-30","value":108920000},{"time":"2017-12-30","value":112035000},{"time":"2018-12-30","value":118217000},{"time":"2019-12-30","value":124243000},{"time":"2020-12-30","value":114537000},{"time":"2021-12-30","value":140815000},{"time":"2022-12-30","value":166562000},{"time":"2023-12-30","value":161287000}],"Net Margins":[{"time":"2014-12-30","value":0.2744352213855132},{"time":"2015-12-30","value":-0.21936069875405986},{"time":"2016-12-30","value":0.14069959603378626},{"time":"2017-12-30","value":1.0362833043245414},{"time":"2018-12-30","value":-0.34696363467183233},{"time":"2019-12-30","value":0.20801171897008283},{"time":"2020-12-30","value":0.12816819019181575},{"time":"2021-12-30","value":0.36351240989951356},{"time":"2022-12-30","value":0.20319160432751768},{"time":"2023-12-30","value":-0.014309894783832548}],"Assets":[{"time":"2014-12-30","value":500758000},{"time":"2015-12-30","value":349323000},{"time":"2016-12-30","value":384992000},{"time":"2017-12-30","value":551616000},{"time":"2018-12-30","value":547242000},{"time":"2019-12-30","value":557492000},{"time":"2020-12-30","value":548150000},{"time":"2021-12-30","value":596152000},{"time":"2022-12-30","value":609867000},{"time":"2023-12-30","value":576662000}],"Stockholders Equity":[{"time":"2014-12-30","value":251450000},{"time":"2015-12-30","value":165251000},{"time":"2016-12-30","value":194270000},{"time":"2017-12-30","value":353078000},{"time":"2018-12-30","value":303558000},{"time":"2019-12-30","value":327213000},{"time":"2020-12-30","value":335349000},{"time":"2021-12-30","value":384971000},{"time":"2022-12-30","value":402747000},{"time":"2023-12-30","value":391762000}],"ROE":[{"time":"2014-12-30","value":0.11333863591171207},{"time":"2015-12-30","value":-0.14468293686573758},{"time":"2016-12-30","value":0.07888505687960055},{"time":"2017-12-30","value":0.32882252646723953},{"time":"2018-12-30","value":-0.13512080063776938},{"time":"2019-12-30","value":0.07898219202782286},{"time":"2020-12-30","value":0.04377529081643303},{"time":"2021-12-30","value":0.1329658597660603},{"time":"2022-12-30","value":0.08403290403156324},{"time":"2023-12-30","value":-0.00589133198217285}],"ROA":[{"time":"2014-12-30","value":0.06916115169403185},{"time":"2015-12-30","value":0.0007671982663609324},{"time":"2016-12-30","value":0.036146205635441776},{"time":"2017-12-30","value":0.20338786402134817},{"time":"2018-12-30","value":-0.0993600637377979},{"time":"2019-12-30","value":0.05132629705897125},{"time":"2020-12-30","value":0.024788835172854146},{"time":"2021-12-30","value":0.10205283216360928},{"time":"2022-12-30","value":0.06434353719745453},{"time":"2023-12-30","value":0.024501354346220142}]}

NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in the United States and internationally. The company manufactures and sells mechanical and electronic cabinet locks and other locking mechanisms, including disc tumbler locks; pin tumbler locking mechanisms under KeSet, System 64, TuBar, and Turbine brands; and electronic locks under CompX eLock and StealthLock brands for use in various applications, such as mailboxes, ignition systems, file cabinets, desk drawers, tool storage cabinets, high security medical cabinetry, integrated inventory and access control secured narcotics boxes, electronic circuit panels, storage compartments, gas station security, vending and cash containment machines. It also offers original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers, and other exhaust components; gauges, such as GPS speedometers and tachometers; mechanical and electronic controls and throttles; wake enhancement devices, trim tabs, steering wheels, and other billet aluminum accessories; dash panels, LED indicators, wire harnesses, and other accessories; and grab handles, pin cleats, and other accessories; primarily for performance and ski/wakeboard and performance boats. The company sells its component products directly to original equipment manufacturers, as well as through distributors. NL Industries, Inc. was founded in 1891 and is based in Dallas, Texas. NL Industries, Inc. is a subsidiary of Valhi, Inc.

Sector

10-Q
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9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Nl Industries Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$35.3M	$35.66M	$36.01M	$36.37M	$36.73M	$37.1M	$37.47M	$37.84M	$38.22M	$38.6M	$38.98M	$389.8M
DCF		$31M	$27.23M	$23.91M	$21M	$18.44M	$16.2M	$14.23M	$12.49M	$10.97M	$9.636M	$96.36M
Value	$281.5M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 34%

Earnings Stability -14%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-22%	14%	100%	-35%	21%	13%	36%	20%	-1.4%	7.1%
ROA	0.077%	3.6%	20%	-9.9%	5.1%	2.5%	10%	6.4%	2.5%	3.2%
ROE	-14%	7.9%	33%	-14%	7.9%	4.4%	13%	8.4%	-0.59%	2.9%

What is the average Net Margin?

The average Net Margin over the past 5 years is +9.03%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +5.38%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +2.79%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +2.1%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +3.31%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +2.14%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Data are missing

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-	-	-	-	-	-	-	-	-	-
Debt Equity	-	-	-	-	-	-	-	-	-	-
MIN
Graham Stability	-	-	100%	-110%	86%	44%	-	100%	-6.9%	-110%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is -.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -.

What is the Graham’s Stability?

Graham’s Stability measure stands at -1.14.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	5.8%	6.4%	12%	-3.2%	0.82%
Net Income	-	-	-	-	-130%
Stockholders Equity	11%	5.2%	5.3%	-2.7%	-0.5%
FCF	5.6%	21%	28%	54%	6.2%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +6.41%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.82%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -43.76%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -127.99%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +5.23%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.5%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +20.78%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +6.24%.