Valhi (VHI) AI Stock Analysis

• Market Cap: $496.01M
• Dividend Yield: 1.88%
• Average Volume (3M): 19.63K
• Price to Earnings (P/E): 4.6
• Beta (1Y): 1.39
• Revenue Growth: 9.53%
• EPS Growth: N/A
• Country: US
• Employees: 3,050
• Sector: Basic Materials
• Sector Strength: 59
• Industry: Chemicals
• EPS (TTM): 3.79
• Shares Outstanding: 28,294,792
• 10 Day Avg. Volume: 7,914
• 30 Day Avg. Volume: 19,627
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.46
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.51
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Valhi's overall stock score of 63.75 reflects a company in recovery mode, with positive signs of revenue growth and improved profitability but also facing challenges such as low net profit margins and high liabilities. The technical analysis indicates a bearish trend, although the attractive valuation with a low P/E ratio suggests potential undervaluation. The lack of significant recent earnings call data and corporate events means these factors did not impact the score.

Valhi Business Overview & Revenue Model

Company Description

Valhi, Inc. engages in the chemicals, component products, and real estate management and development businesses in the Asia Pacific, Europe, North America, and internationally. The company's Chemicals segment produces and markets titanium dioxide pigments (TiO2), which are white inorganic pigments used in various applications by paint, plastics, decorative laminate, and paper manufacturers. It offers TiO2 under the KRONOS name through agents and distributors. The company's Component Products segment manufactures mechanical and electrical cabinet locks, and other locking mechanisms for use in ignition systems, mailboxes, file cabinets, desk drawers, tool storage cabinets, vending and cash containment machines, integrated inventory and access control secured narcotics boxes, medical cabinetry security, electronic circuit panels, storage compartments, and gas station security applications. It also provides stainless steel exhaust components, gauges, throttle controls, wake enhancement systems, trim tabs, and related hardware and accessories primarily for performance and ski/wakeboard boats. The company's Real Estate Management and Development segment offers utility services to industrial and municipal customers; owns real properties; and develops land holdings for commercial, industrial, and residential purposes. It also holds marketable securities and other investments. The company was incorporated in 1932 and is based in Dallas, Texas. Valhi, Inc. is a subsidiary of Contran Corporation.

How the Company Makes Money

Valhi, Inc. generates revenue through its diversified operations in chemicals, component products, and real estate management. The chemical segment, which is the largest revenue contributor, primarily earns money from the production and sale of titanium dioxide pigments used in a wide range of applications, including coatings, plastics, and paper. The component products segment generates income by manufacturing and selling security products such as locks and access control devices, as well as precision ball bearing slides used in various industries. Additionally, Valhi derives revenue from its real estate management activities, including property development and leasing operations. The company's earnings are significantly influenced by global economic conditions, demand for titanium dioxide, and housing market trends.

Valhi Financial Statement Overview

Summary

Valhi shows a mix of strengths and weaknesses across its financial statements. Revenue growth and improved profitability are positive signs, but the low net profit margin and high liabilities could present future challenges. The cash flow situation has improved but remains volatile, necessitating careful liquidity management. Overall, the company is on a recovery path but must continue addressing cost efficiency and leverage issues to ensure sustainable growth.

Income Statement

Valhi's revenue showed a positive growth trajectory, increasing from previous periods, particularly with a recovery from a negative EBIT and net income in 2023 to a positive margin in 2024. The gross profit margin improved significantly, indicating better cost management or pricing power. However, the net profit margin remains relatively low, suggesting ongoing challenges in efficiency or cost control.

Balance Sheet

Valhi's balance sheet shows a stable equity base with a reasonable debt-to-equity ratio, reflecting manageable leverage. The equity ratio is healthy, indicating a strong asset base relative to equity. However, the overall liabilities remain high, which could pose risks if revenue growth slows or costs rise unexpectedly.

Cash Flow

The company has shown improvement in operating cash flows, moving from negative to positive free cash flow. The free cash flow to net income ratio indicates that cash flows are supporting earnings, though cash reserves have declined, potentially limiting flexibility. The volatility in cash flow suggests potential risks in maintaining liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.17B	1.92B	2.22B	2.30B	1.85B
	Gross Profit
486.30M	245.20M	490.40M	580.20M	412.10M
	EBIT
230.10M	-19.50M	139.30M	231.00M	68.30M
	EBITDA
360.80M	62.90M	256.30M	349.60M	205.30M
	Net Income Common Stockholders
108.00M	-12.10M	136.10M	197.70M	84.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
350.20M	463.10M	553.60M	701.00M	523.00M
	Total Assets
2.80B	2.74B	2.84B	3.01B	2.89B
	Total Debt
584.00M	569.00M	580.70M	672.50M	814.10M
	Net Debt
235.70M	162.00M	102.20M	-25.90M	295.50M
	Total Liabilities
1.42B	1.48B	1.53B	1.85B	1.88B
	Stockholders Equity
1.04B	935.80M	958.60M	829.50M	682.50M
Cash Flow		Free Cash Flow
13.10M	-44.60M	-32.70M	395.60M	86.70M
	Operating Cash Flow
44.00M	3.90M	34.90M	459.70M	152.20M
	Investing Cash Flow
-125.00M	-29.00M	-146.70M	-37.40M	-57.00M
	Financing Cash Flow
-2.30M	-75.90M	-114.00M	-189.10M	-122.50M

Valhi Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 16.99
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VHI, the sentiment is Neutral. The current price of 16.99 is above the 20-day moving average (MA) of 16.20, above the 50-day MA of 16.85, and below the 200-day MA of 23.63, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 53.23 is Neutral, neither overbought nor oversold. The STOCH value of 71.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VHI.

Valhi Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ASIX	68 Neutral	$571.01M	13.15	5.83%	2.99%	-1.05%	-16.57%
VHI	64 Neutral	$496.01M	4.63	10.95%	1.88%	9.53%	―
LXU	56 Neutral	$445.64M	―	-5.28%	―	-4.23%	-257.82%
RYAM	54 Neutral	$287.70M	―	-5.75%	―	-0.79%	62.16%
ORGN	53 Neutral	$101.38M	―	-22.00%	―	8.60%	-441.73%
Sector *	49 Neutral	$1.95B	-1.37	-21.43%	3.74%	0.84%	-29.84%
TROX	48 Neutral	$869.96M	―	-8.44%	9.11%	4.15%	57.25%

Valhi Corporate Events

Valhi Achieves Financial Turnaround with Improved Net Income

Valhi, Inc. reported a significant turnaround in its financial performance for the third quarter and first nine months of 2024, with net income of $57.5 million compared to a loss in the previous year, driven by strong results from its Chemicals Segment. The acquisition of a joint venture interest in Louisiana Pigment Company contributed to a substantial non-cash gain, boosting net sales and operating income. Despite lower TiO2 prices, increased sales volumes and reduced production costs lifted the Chemicals Segment, while other segments faced challenges due to decreased sales and development delays.