Valhi (NYSE:VHI) & Geltech Solutions (OTCMKTS:GLTC) Critical Review

Valhi (NYSE:VHI) and Geltech Solutions (OTCMKTS:GLTC) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Insider and Institutional Ownership

3.8% of Valhi shares are held by institutional investors. 0.2% of Valhi shares are held by company insiders. Comparatively, 61.8% of Geltech Solutions shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Valhi and Geltech Solutions”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valhi	$2.06 billion	0.18	$108.00 million	$0.64	20.04
Geltech Solutions	N/A	N/A	N/A	N/A	N/A

Valhi has higher revenue and earnings than Geltech Solutions.

Profitability

This table compares Valhi and Geltech Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valhi	0.89%	2.22%	1.13%
Geltech Solutions	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Valhi and Geltech Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valhi	2	0	0	0	1.00
Geltech Solutions	0	0	0	0	0.00

Valhi currently has a consensus price target of $12.00, indicating a potential downside of 6.43%. Given Valhi’s stronger consensus rating and higher possible upside, equities analysts clearly believe Valhi is more favorable than Geltech Solutions.

Summary

Valhi beats Geltech Solutions on 7 of the 8 factors compared between the two stocks.

About Valhi

Valhi, Inc. engages in the chemicals, component products, and real estate management and development businesses in Europe, North America, the Asia Pacific, 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 Dixie Rice Agricultural L.L.C.

About Geltech Solutions

GelTech Solutions, Inc. is a product innovation company, which specializes in environmentally-friendly chemicals and products that reduce costs associated with fighting fire, protecting assets, water retention and improving ROI for its customers. Its product lines include chemicals and equipment designed for use in wildland and municipal fire management, as well as industrial, agriculture, commercial, and personal home applications. Its products include: FireIce, is a water soluble fire retardant used to protect structures, personal property and forest wildfires; Soil2O Dust Control is effective at controlling airborne particulate matter while substantially reducing water usage on traffic areas; and Soil2O Soil Cap, a product which is effective at controlling dust and erosion of non-traffic and storage areas. The company was founded by Michael Cordani, Joseph Ingarra and Peter Cordani on July 19, 2006 and is headquartered in Jupiter, FL.