Valhi, Inc. engages in the chemicals, component products, waste management, and real estate businesses worldwide. The company was founded in 1932 and is based in Dallas, Texas.
VHI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Valhi Inc. To summarize, we found that Valhi Inc ranked in the 83th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 840.83%. In terms of the factors that were most noteworthy in this DCF analysis for VHI, they are:
33% of the company's capital comes from equity, which is greater than only 15.45% of stocks in our cash flow based forecasting set.
Valhi Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 14.97% of tickers in our DCF set.
Relative to other stocks in its sector (Basic Materials), Valhi Inc has a reliance on debt greater than 91.71% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
NX, TROX, PGTI, RS, and TGLS can be thought of as valuation peers to VHI, in the sense that they are in the Basic Materials sector and have a similar price forecast based on DCF valuation.
Previously, I wrote up a detailed take on the Contran Corporation companies, National Lead (NL), Kronos Worldwide (KRO), CompX International (CIX), and Valhi (VHI). Since that article, Valhi has experienced multiple significant changes that deserve further attention. Preferred Shares Cancellation If a tree falls in the forest and no one...
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Valhi, Inc. (NYSE: VHI) announced that at its annual stockholder meeting held today, its stockholders approved a reverse stock split of the company’s common stock and that, following the stockholder approval, its board of directors established a reverse stock split ratio of 1-for-12. The reverse stock split is expected to occur on June 1, 2020, with trading to begin on a split-adjusted basis on the New York Stock Exchange (NYSE) at the market open on June 2, 2020. Trading in the common stock will continue on the NYSE under the symbol “VHI” but the security will be assigned a new CUSIP number.