Kronos Worldwide, Inc. produces and markets titanium dioxide pigments (TiO2) worldwide. It produces TiO2 in two crystalline forms, rutile and anatase to impart whiteness, brightness, opacity, and durability for products, paints, coatings, plastics, paper, fibers, and ceramics, as well as for various specialty products, such as inks, food, and cosmetics. The company is based in Dallas.
KRO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Kronos Worldwide Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Kronos Worldwide Inc ranked in the 60th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 98%. The most interesting components of our discounted cash flow analysis for Kronos Worldwide Inc ended up being:
The compound growth rate in the free cash flow of Kronos Worldwide Inc over the past 5.41 years is 0.27%; that's better than 61.65% of cash flow producing equities in the Basic Materials sector, where it is classified.
Kronos Worldwide Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 17.06% of tickers in our DCF set.
Kronos Worldwide Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 6.23. This coverage rate is greater than that of 67.64% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Kronos Worldwide Inc? See CC, CE, SXC, CSL, and CINR.
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After a sharp correction that also impacted other titania market heavyweights, the stock of Kronos Worldwide, Inc. (KRO), a global producer of value-added titanium dioxide pigments, is yielding more than 7.5%, which value investors may find appealing. Data by YCharts Nevertheless, there are a few nuances that my esteemed readers...