Critical Survey: LSB Industries (LXU) and Icahn Enterprises (IEP)

LSB Industries (NYSE: LXU) and Icahn Enterprises (NASDAQ:IEP) are both multi-sector conglomerates companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Earnings and Valuation

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This table compares LSB Industries and Icahn Enterprises’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LSB Industries $427.50 million 0.43 -$29.21 million ($2.18) -2.92
Icahn Enterprises $21.74 billion 0.45 $2.43 billion $14.64 3.89

Icahn Enterprises has higher revenue and earnings than LSB Industries. LSB Industries is trading at a lower price-to-earnings ratio than Icahn Enterprises, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares LSB Industries and Icahn Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LSB Industries -6.83% -6.65% -2.49%
Icahn Enterprises 10.98% 23.08% 7.32%

Volatility & Risk

LSB Industries has a beta of 4.27, meaning that its stock price is 327% more volatile than the S&P 500. Comparatively, Icahn Enterprises has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for LSB Industries and Icahn Enterprises, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LSB Industries 0 0 0 0 N/A
Icahn Enterprises 0 0 1 0 3.00

Icahn Enterprises has a consensus target price of $61.00, suggesting a potential upside of 7.21%. Given Icahn Enterprises’ higher probable upside, analysts plainly believe Icahn Enterprises is more favorable than LSB Industries.

Dividends

Icahn Enterprises pays an annual dividend of $7.00 per share and has a dividend yield of 12.3%. LSB Industries does not pay a dividend. Icahn Enterprises pays out 47.8% of its earnings in the form of a dividend.

Institutional and Insider Ownership

61.4% of LSB Industries shares are held by institutional investors. Comparatively, 97.7% of Icahn Enterprises shares are held by institutional investors. 18.2% of LSB Industries shares are held by company insiders. Comparatively, 90.1% of Icahn Enterprises shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Icahn Enterprises beats LSB Industries on 13 of the 15 factors compared between the two stocks.

About LSB Industries

LSB Industries, Inc. is a holding company. The Company, through its subsidiaries, is engaged in the manufacture and sale of chemical products. The Company operates through chemical business segment. It is a manufacturer and distributor of nitrogen fertilizer and other nitrogen products in North America. Its principal nitrogen products are ammonia (AN), fertilizer grade ammonium nitrate (high density ammonium nitrate prills used in the agricultural industry (HDAN)), urea ammonia nitrate (UAN), and AN solution for agricultural applications, high purity and commercial grade ammonia, high purity AN, sulfuric acids, concentrated, blended and regular nitric acid, mixed nitrating acids, carbon dioxide, and diesel exhaust fluid for industrial applications, and industrial grade AN (low density ammonium nitrate prills used in the mining industry (LDAN)) and 83% AN solution (AN solution) for the mining industry. Its customers include cooperatives and independent fertilizer distributors.

About Icahn Enterprises

Icahn Enterprises L.P. (Icahn Enterprises) is a holding company. The Company’s segments include Automotive, Energy, Metals, Railcar, Gaming, Food Packaging, Mining, Real Estate and Home Fashion. The Company’s Investment segment includes various private investment funds. The Company operates its Automotive segment through its ownership in Federal-Mogul Holdings Corporation and IEH Auto Parts Holding LLC. The Company operates Energy segment through its controlling interest in CVR Energy, Inc. It operates its Metals segment through its subsidiary, PSC Metals, Inc. The Company operates its Railcar segment through its ownership interests in American Railcar Industries, Inc. Its Food Packaging segment consists of ownership in Viskase Companies, Inc. The Company’s Real Estate operations consist of rental real estate, property development and associated resorts. It also owns a limited partner interest in Icahn Enterprises Holdings L.P. (Icahn Enterprises Holdings).

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