Overall VHI gets a fundamental rating of 4 out of 10. We evaluated VHI against 83 industry peers in the Chemicals industry. VHI has an average financial health and profitability rating. VHI has a correct valuation and a medium growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

VHI had positive earnings in the past year.
In the past year VHI has reported a negative cash flow from operations.
VHI had positive earnings in 4 of the past 5 years.
VHI had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

VHI has a Return On Assets (0.68%) which is comparable to the rest of the industry.
With a Return On Equity value of 1.76%, VHI perfoms like the industry average, outperforming 57.83% of the companies in the same industry.
VHI has a Return On Invested Capital (2.61%) which is in line with its industry peers.

		Industry Rank	Sector Rank
ROA	0.68%
ROE	1.76%
ROIC	2.61%

ROA(3y)2.2%

ROA(5y)2.55%

ROE(3y)6.18%

ROE(5y)8.39%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

VHI has a Profit Margin of 0.89%. This is comparable to the rest of the industry: VHI outperforms 57.83% of its industry peers.
In the last couple of years the Profit Margin of VHI has grown nicely.
Looking at the Operating Margin, with a value of 4.49%, VHI is in line with its industry, outperforming 40.96% of the companies in the same industry.
In the last couple of years the Operating Margin of VHI has grown nicely.
With a Gross Margin value of 17.53%, VHI is not doing good in the industry: 68.67% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of VHI has declined.

		Industry Rank	Sector Rank
OM	4.49%
PM (TTM)	0.89%
GM	17.53%

OM growth 3Y-11.53%

OM growth 5Y1.8%

PM growth 3Y-2.52%

PM growth 5Y14.63%

GM growth 3Y-7.09%

GM growth 5Y-2.42%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VHI is destroying value.
Compared to 1 year ago, VHI has about the same amount of shares outstanding.
VHI has about the same amout of shares outstanding than it did 5 years ago.
The debt/assets ratio for VHI is higher compared to a year ago.

2.2 Solvency

VHI has an Altman-Z score of 1.74. This is a bad value and indicates that VHI is not financially healthy and even has some risk of bankruptcy.
VHI's Altman-Z score of 1.74 is in line compared to the rest of the industry. VHI outperforms 43.37% of its industry peers.
A Debt/Equity ratio of 0.63 indicates that VHI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.63, VHI perfoms like the industry average, outperforming 51.81% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.63
Debt/FCF	N/A
Altman-Z	1.74

ROIC/WACC0.27

WACC9.77%

2.3 Liquidity

A Current Ratio of 3.64 indicates that VHI has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.64, VHI belongs to the top of the industry, outperforming 86.75% of the companies in the same industry.
A Quick Ratio of 1.76 indicates that VHI should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.76, VHI is in the better half of the industry, outperforming 71.08% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	3.64
Quick Ratio	1.76

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

VHI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -57.75%.
VHI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.04% yearly.
VHI shows a decrease in Revenue. In the last year, the revenue decreased by -0.65%.
Measured over the past years, VHI shows a small growth in Revenue. The Revenue has been growing by 2.10% on average per year.

EPS 1Y (TTM)-57.75%

EPS 3Y-5.31%

EPS 5Y14.04%

EPS Q2Q%-116.42%

Revenue 1Y (TTM)-0.65%

Revenue growth 3Y-2.86%

Revenue growth 5Y2.1%

Sales Q2Q%-5.64%

3.2 Future

VHI is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.52% yearly.
Based on estimates for the next years, VHI will show a quite strong growth in Revenue. The Revenue will grow by 9.77% on average per year.

EPS Next Y0.91%

EPS Next 2Y6.52%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year11.92%

Revenue Next 2Y9.77%

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 13.02 indicates a correct valuation of VHI.
Compared to the rest of the industry, the Price/Earnings ratio of VHI indicates a rather cheap valuation: VHI is cheaper than 81.93% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of VHI to the average of the S&P500 Index (28.32), we can say VHI is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 3.86, the valuation of VHI can be described as very cheap.
VHI's Price/Forward Earnings ratio is rather cheap when compared to the industry. VHI is cheaper than 98.80% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, VHI is valued rather cheaply.

		Industry Rank	Sector Rank
PE	13.02
Fwd PE	3.86

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VHI indicates a rather cheap valuation: VHI is cheaper than 90.36% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	5.56

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VHI does not grow enough to justify the current Price/Earnings ratio.

PEG (NY)14.36

PEG (5Y)0.93

EPS Next 2Y6.52%

EPS Next 3YN/A

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.30%, VHI has a reasonable but not impressive dividend return.
VHI's Dividend Yield is a higher than the industry average which is at 2.27.
Compared to an average S&P500 Dividend Yield of 1.83, VHI pays a bit more dividend than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	2.3%

5.2 History

The dividend of VHI decreases each year by -19.61%.
VHI has been paying a dividend for at least 10 years, so it has a reliable track record.
VHI has not decreased its dividend in the last 3 years.

Dividend Growth(5Y)-19.61%

Div Incr Years0

Div Non Decr Years3

5.3 Sustainability

VHI pays out 49.46% of its income as dividend. This is a bit on the high side, but may be sustainable.

DP49.46%

EPS Next 2Y6.52%

EPS Next 3YN/A

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VALHI INC / VHI FAQ

What is the fundamental rating for VHI stock?

ChartMill assigns a fundamental rating of 4 / 10 to VHI.

What is the valuation status of VALHI INC (VHI) stock?

ChartMill assigns a valuation rating of 5 / 10 to VALHI INC (VHI). This can be considered as Fairly Valued.

Can you provide the profitability details for VALHI INC?

VALHI INC (VHI) has a profitability rating of 4 / 10.

Can you provide the financial health for VHI stock?

The financial health rating of VALHI INC (VHI) is 4 / 10.

Can you provide the dividend sustainability for VHI stock?

The dividend rating of VALHI INC (VHI) is 5 / 10 and the dividend payout ratio is 49.46%.