NL Industries (NL) AI Stock Analysis

• Market Cap: $297.09M
• Dividend Yield: 10.18%
• Average Volume (3M): 25.88K
• Price to Earnings (P/E): 30.7
• Beta (1Y): 0.88
• Revenue Growth: 5.51%
• EPS Growth: -83.40%
• Country: US
• Employees: 3,034
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): -0.16
• Shares Outstanding: 48,862,736
• 10 Day Avg. Volume: 30,251
• 30 Day Avg. Volume: 25,875
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 2.60
• P/FCF Ratio: 15.72
• Enterprise Value/Market Cap: 0.66
• Enterprise Value/Revenue: 1.23
• Enterprise Value/Gross Profit: 4.15
• Enterprise Value/Ebitda: 10.30
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: $6.50 ▲(13.24% Upside)

NL Industries' overall stock score is primarily influenced by its mixed financial performance, with strong balance sheet metrics but significant cash flow challenges. The technical analysis indicates a bearish trend, while the high P/E ratio suggests potential overvaluation. However, the attractive dividend yield provides a positive aspect for income investors.

Positive Factors

Strong balance sheet / low leverage

Very low leverage provides durable financial flexibility: it reduces default risk, preserves borrowing capacity for capex or M&A, and supports dividend payouts during downturns. Over a multi-month horizon this strength underpins operational continuity and strategic optionality.

Sustainable operating margins

Consistent gross and operating margins indicate durable operational efficiency and pricing power in core chemical and coatings businesses. Stable margins across cycles support cash generation potential and the ability to reinvest in product development and customer relationships over the medium term.

Moderate, steady revenue growth

Positive mid-single-digit revenue growth reflects gradual market share retention and diversified end-market exposure. Sustained top-line expansion, even if modest, supports steady demand for industrial coatings and chemicals and provides a base for margin and cash-flow improvement over several quarters.

Negative Factors

Negative operating and free cash flow

Persistent negative operating and free cash flows signal difficulty converting reported profits into cash, which undermines the firm's ability to fund capex, debt servicing, and dividends without external financing. This structural cash generation weakness increases liquidity and execution risk over months.

Low return on equity

A sub-3% ROE indicates limited effectiveness in generating profits from shareholder capital. Over time this constrains the company’s capacity to compound shareholder value, limits reinvestment returns, and raises questions about capital allocation and long-term competitiveness in its end markets.

Highly negative recent EPS growth

An ~83% decline in EPS points to significant earnings volatility or one-time losses that impair profit predictability. Such swings weaken management's ability to plan investments and sustain distributions; persistent earnings volatility raises execution and refinancing risks over a 2–6 month horizon.

NL Industries Business Overview & Revenue Model

Company Description

NL Industries, Inc. is a diversified holding company primarily engaged in the manufacturing and sale of various industrial products, with a strong focus on the chemical and coatings sectors. The company operates through its subsidiaries, which include Crown Crafts, Inc. and other entities involved in the production of specialty chemicals, coatings, and related products, serving a wide range of industries such as construction, automotive, and consumer goods.

How the Company Makes Money

NL Industries generates revenue through the sale of its industrial products, including specialty chemicals and coatings, which are sold to a diverse customer base in various sectors. Key revenue streams include direct sales to manufacturers and distributors, as well as long-term contracts with large corporations. The company also benefits from strategic partnerships with other firms in the chemical industry, enhancing its market reach and product offerings. Additionally, NL Industries leverages its expertise in innovation to develop new products that meet evolving customer needs, further driving sales and profitability.

NL Industries Financial Statement Overview

Summary

NL Industries demonstrates a mixed financial performance. The income statement shows moderate growth and stable margins, while the balance sheet is strong with low leverage. However, cash flow challenges indicate potential liquidity issues. The company should focus on improving cash flow management to enhance overall financial health.

Income Statement

NL Industries shows a moderate revenue growth rate of 4.11% in the TTM period, indicating a positive trend. The gross profit margin of 29.65% and net profit margin of 6.10% suggest stable profitability, although the net margin is relatively low. The EBIT margin of 14.74% and EBITDA margin of 17.67% reflect efficient operations. However, the decline in revenue growth in previous years is a concern.

Balance Sheet

The company's balance sheet is strong with a very low debt-to-equity ratio, indicating minimal leverage risk. The return on equity (ROE) of 2.47% in the TTM period is low, suggesting limited profitability from equity. The equity ratio is healthy, showing a solid capital structure. Overall, the balance sheet reflects financial stability.

Cash Flow

Cash flow analysis reveals challenges, with negative operating and free cash flows in the TTM period. The free cash flow growth rate is negative, indicating cash flow issues. The operating cash flow to net income ratio is negative, suggesting inefficiencies in converting income to cash. The free cash flow to net income ratio is positive, but overall cash flow management needs improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	159.00M	145.94M	161.29M	166.56M	140.81M	114.54M
Gross Profit	47.15M	41.36M	49.22M	48.80M	42.75M	32.85M
EBITDA	19.00M	107.84M	-1.70M	44.16M	65.82M	18.77M
Net Income	9.70M	67.23M	-2.31M	33.84M	51.19M	14.68M
Balance Sheet
Total Assets	500.20M	578.26M	576.66M	609.87M	596.15M	548.15M
Cash, Cash Equivalents and Short-Term Investments	101.92M	163.15M	164.67M	139.03M	147.00M	137.04M
Total Debt	500.00K	500.00K	500.00K	500.00K	500.00K	500.00K
Total Liabilities	106.93M	162.35M	184.90M	207.12M	211.18M	212.80M
Stockholders Equity	375.38M	396.90M	369.81M	382.15M	362.47M	311.88M
Cash Flow
Free Cash Flow	-26.66M	24.14M	35.87M	23.24M	13.52M	17.28M
Operating Cash Flow	-23.27M	25.57M	37.00M	26.93M	17.61M	19.02M
Investing Cash Flow	1.42M	58.87M	22.10M	-67.87M	6.71M	-3.14M
Financing Cash Flow	-30.81M	-41.63M	-15.23M	-36.80M	-14.35M	-8.48M

NL Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NL, the sentiment is Positive. The current price of 5.74 is below the 20-day moving average (MA) of 6.04, above the 50-day MA of 5.73, and below the 200-day MA of 6.17, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 52.61 is Neutral, neither overbought nor oversold. The STOCH value of 65.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NL.

NL Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIX	81 Outperform	$287.13M	14.86	13.65%	9.65%	5.52%	2.86%
BAER	69 Neutral	$159.96M	-5.57	8.75%	―	54.35%	70.17%
SNT	67 Neutral	$95.17M	―	―	―	―	―
MG	66 Neutral	$446.09M	24.78	8.42%	―	-3.20%	60.03%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
NL	62 Neutral	$297.09M	30.71	2.54%	10.18%	5.51%	-83.40%
EVLV	48 Neutral	$1.08B	-16.95	-51.67%	―	41.61%	-1.76%