Why You Should Add Kronos Worldwide (KRO) to Your Portfolio

Kronos Worldwide (NYSE:KRO), Inc.’s KRO stock looks promising at the moment. The company’s shares have rallied around 27% over the past six months. 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.

Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock an attractive choice for investors right now.

What Makes KRO an Attractive Pick?

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 the current year has increased around 12.5%. The consensus estimate for the next year has also been revised 11.8% upward over the same time frame.

Healthy Growth Prospects

The Zacks Consensus Estimate for earnings for the current year for Kronos Worldwide is currently pegged at 81 cents, reflecting an expected year-over-year growth of 47.3%. Moreover, earnings are expected to register a 17.3% growth in 2022.

Positive Earnings Surprise History

Kronos Worldwide has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 138.3%, on average.

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 10.92, cheaper compared with the industry average of 13.21.

Strong Q4 & Upbeat Prospects

Kronos Worldwide saw higher profits in the fourth quarter of 2020, aided by higher income from operations on increased sales volumes and lower production costs. Earning of 9 cents per share for the quarter trounced the Zacks Consensus Estimate of 4 cents. Net sales rose roughly 11% year over year to $414.9 million on the back of by higher sales volumes and also surpassed the Zacks Consensus Estimate of $361.1 million.

Kronos Worldwide is poised to benefit from higher demand for titanium dioxide (TiO2) in 2021. It witnessed higher demand for its products in the second half of 2020 despite the impacts of the coronavirus pandemic and expect these demand levels to continue into 2021. Higher demand in European and North American markets are likely to drive its TiO2 sales volumes this year.

The company, in its fourth-quarter call, said that it expects its sales and income from operations for 2021 to be higher on a year-over-year basis, mainly due to higher average TiO2 selling prices and sales volumes. It also sees production volumes for this year to be modestly higher year over year, in sync with an expected increase in demand for its products. Kronos Worldwide also expects TiO2 selling prices to rise modestly in 2021.

Kronos Worldwide Inc Price and Consensus

Kronos Worldwide Inc price-consensus-chart | Kronos Worldwide Inc Quote

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NYSE:NUE) NUE, Fortescue Metals Group (OTC:FSUGY) Limited FSUGY and United States Steel (NYSE:X) Corporation X.

Nucor has a projected earnings growth rate of 122.5% for the current year. The company’s shares have surged around 151% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortescue has a projected earnings growth rate of 107.8% for the current fiscal. The company’s shares have surged around 187% in a year. It currently sports a Zacks Rank #1.

U.S. Steel has an expected earnings growth rate of 201.1% for the current year. The company’s shares have surged around 312% in the past year. It currently carries a Zacks Rank #2.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>