NL Industries, Inc. (NL): BCG Matrix [Dec-2025 Updated]

As a seasoned analyst, you know that a company's true health shows up in its portfolio mix, and NL Industries, Inc. as of late 2025 is certainly no exception. We see clear Stars-think CompX International's Marine Components with sales up 36%-fueling growth, while the holding company structure relies on stable Cash Cow distributions to keep that $101.9 million balance strong. However, the drag is real: Legacy Environmental Liabilities are Dogs, causing a net cash use of $40.2 million in H1 2025, and the 31% stake in Kronos Worldwide is a classic Question Mark, posting an $11.3 million equity loss in Q3. Dive in to see precisely where NL Industries must direct its capital for the best near-term return.

Background of NL Industries, Inc. (NL)

You're looking at NL Industries, Inc. (NL), which you should know is primarily a holding company, tracing its roots all the way back to the National Lead Company founded in 1891 before adopting its current name in 1986. The corporate office is located in Dallas, Texas, and NL Industries, Inc. operates as a subsidiary of Valhi, Inc.

NL Industries, Inc. structures its operations across two main areas: component products and chemicals, through its significant ownership stakes. The component products business is conducted through its majority-owned subsidiary, CompX International, Inc.

The CompX segment manufactures a variety of engineered components. These are sold into diverse end markets including recreational transportation, postal services, office and institutional furniture, cabinetry, tool storage, healthcare, gas stations, and vending equipment. CompX also produces security products and precision ball bearing slides. For the second quarter of 2025, CompX showed resilience with net sales hitting $40.3 million, an increase from $35.9 million in the prior year's second quarter, driven by higher sales in Security Products and Marine Components, particularly to government and towboat markets. This translated to a segment profit of $6.3 million in Q2 2025.

The other major component of NL Industries, Inc.'s profile is its significant interest in Kronos Worldwide, Inc., a global producer of value-added titanium dioxide TiO_2$) pigments. These pigments are essential for imparting whiteness and opacity to coatings, plastics, paper, inks, and cosmetics. However, the performance here has been challenging recently; for Q2 2025, NL recognized equity in losses from Kronos of $2.8 million, a sharp reversal from the equity in earnings of $6.0 million reported in Q2 2024.

Looking at the consolidated results for the first half of 2025, NL Industries, Inc. reported net sales of $80.6 million, up from $73.9 million for the same six months in 2024. Still, the net income attributable to NL stockholders dropped significantly to just $1.022 million (or $0.02 per share) for the first half of 2025, compared to $14.674 million (or $0.30 per share) in the first half of 2024. A big part of this was an unrealized loss of $8.6 million related to marketable equity securities during the first six months of 2025. Furthermore, operating cash flow swung to a net use of $40.2 million for the first half of 2025, largely because of environmental remediation payments, including about $56.1 million toward the RBS settlement.

As of November 3, 2025, the stock price for NL Industries, Inc. was $5.90, giving the company a market capitalization of approximately $288 million or $0.27 Billion USD as of December 2025. The company has been paying a quarterly dividend, with the latest announced dividend being $0.09 per share, and the forward annual payout is estimated at $0.57.

NL Industries, Inc. (NL) - BCG Matrix: Stars

You're looking at the business units within NL Industries, Inc. (NL) that are leading the charge in high-growth areas, which is exactly where the Stars quadrant of the Boston Consulting Group (BCG) Matrix focuses. These are the leaders in their respective businesses, but they certainly aren't passive; they consume cash to maintain that leading position.

For NL Industries, Inc., the Star category is currently anchored by the performance within its majority-owned subsidiary, CompX International Inc., specifically within its specialized component segments. These areas show the high growth and market share necessary for this classification. The overall segment profit for CompX International Inc. in the third quarter of 2025 hit $4.8 million, marking a significant year-over-year increase of 45% over the $3.3 million reported in Q3 2024.

The growth story is clearly split between two key areas, both demanding capital to sustain their momentum:

• CompX International's Marine Components, with Q3 2025 sales up 36% in a niche market.
• Security Products segment, driven by strong demand from the high-growth government security market.

These units are the leaders in their specific component niches, which is why they are Stars. They are generating significant revenue, as shown by CompX's Q3 2025 net sales reaching $40.0 million, up from $33.6 million in the prior year's third quarter. To maintain this high market share and capture further growth in these expanding markets, continued investment in promotion and placement is a defintely requirement.

Here's a quick look at the Q3 2025 segment performance that places these units firmly in the Star category:

The scenario suggests that if this high market share in specialized security and marine components is maintained, these units are positioned to eventually transition into Cash Cows as the high-growth market environment for these specific products inevitably slows down. For now, the strategy remains focused on investment to fuel this expansion.

NL Industries, Inc. (NL) - BCG Matrix: Cash Cows

CompX International Inc. (CIX) operates as the majority-owned, stable operating subsidiary for NL Industries, Inc..

The Cash Cow quadrant is characterized by high market share in a mature market, which for NL Industries is best represented by the consistent profitability of CompX International Inc., which generates cash flow that supports the overall corporate structure. For the first nine months of 2025, CompX International reported a segment profit of $17.0 million, an increase from $12.1 million in the first nine months of 2024. This positive contribution is crucial, as it offsets the performance in the chemicals segment, where NL recognized equity in losses of $11.3 million in the third quarter of 2025 alone.

NL Industries, Inc. functions as a holding company, and its liquidity is directly tied to cash distributions from its subsidiaries. The overall corporate cash position is a key indicator of its ability to support shareholder returns despite operational volatility elsewhere in the portfolio. NL Industries reported a cash balance of $101.9 million at the end of Q3 2025.

The commitment to shareholder returns is evident through consistent dividend declarations, even when the consolidated net income is negative. NL Industries declared a quarterly dividend of $0.09 per share, payable on December 16, 2025, to shareholders of record on November 21, 2025. The annualized dividend payment stands at $0.57 per share.

You can see the contrasting performance between the cash-generating component products business and the chemicals segment in the table below:

The focus on maintaining productivity in the Cash Cow unit involves targeted investment in its core areas, which are security products and marine components. The growth drivers for CompX are clear:

• Strength in the government security market.
• Higher expected sales to the government and industrial markets for Marine Components.
• Segment profit increased to $5.9 million in Q1 2025 from $3.7 million in Q1 2024.
• Segment profit rose to $6.3 million in Q2 2025 from $5.1 million in Q2 2024.

The overall corporate financial health, as reflected by cash flow, shows complexity. NL Industries reported net cash used in operating activities of $32.3 million for the first nine months of 2025. However, the company's consolidated net income for Q3 2025 was a loss of $7.8 million.

The company's total revenue for the trailing twelve months (TTM) ending in 2025 was reported as $0.15 Billion USD.

NL Industries, Inc. (NL) - BCG Matrix: Dogs

You're looking at the units within NL Industries, Inc. (NL) that are stuck in low-growth markets and have failed to capture significant market share. These are the Dogs, and honestly, they're where capital gets tied up without much return.

Legacy Environmental Liabilities represent the classic Dog: they are non-revenue generating and act as a constant drain on cash flow. These are the remnants of discontinued operations, specifically lead operations, that require ongoing funding for testing, monitoring, and remediation, creating a perpetual drag on GAAP earnings.

The financial impact of these liabilities was starkly visible in the first half of 2025. The operating cash flow swung to a net use of $40.2 million for the six months ended June 30, 2025. This negative swing was driven largely by a major environmental cash outflow, specifically the payment of approximately $56.1 million plus $0.5 million in interest toward the Raritan Bay Slag global settlement. This single event significantly compressed near-term financial flexibility.

The balance sheet still reflects substantial contingent exposure. While the large settlement payment reduced recorded liabilities, the company still carries significant accruals for ongoing environmental matters. Here's a look at the recorded liabilities as of September 30, 2025, compared to year-end 2024 balances (in thousands):

The total accrued environmental remediation and related costs stood at $13.301 million as of June 30, 2025, down from prior accruals after the settlement payment, but management notes that future testing or stricter standards could increase costs materially. These are units where expensive turn-around plans rarely pay off; divestiture is usually the cleaner path.

Another area fitting the Dog profile involves the volatility from investments, which ties up capital and creates unpredictable earnings impacts. The performance of Marketable Equity Securities, which primarily relate to Valhi, has been a drag. For the first six months of 2025, NL Industries recorded an unrealized loss of $4.991 million related to the change in value of these securities. This contrasts sharply with the prior year period, where the company recognized an unrealized gain.

The drag from these legacy and investment items manifests in several ways:

• Net income attributable to NL stockholders plummeted to $1,022 thousand for the six months ended June 30, 2025.
• Equity in earnings from Kronos Worldwide, Inc. swung to equity in losses of $8.6 million for the first nine months of 2025.
• The company recognized an unrealized loss of $9.1 million on marketable equity securities for the first nine months of 2025.

These perpetual obligations and investment volatility mean that capital is being consumed or impaired by activities outside of the core, growing businesses. Finance: draft 13-week cash view by Friday.

NL Industries, Inc. (NL) - BCG Matrix: Question Marks

You're looking at the Question Marks quadrant for NL Industries, Inc. (NL), and right now, that's almost entirely defined by its investment in Kronos Worldwide, Inc. (KRO). NL holds a 31% noncontrolling equity interest in Kronos Worldwide, Inc. (KRO), which is a producer of titanium dioxide TiO_2$).

This holding is consuming cash and dragging down near-term results, which is classic Question Mark behavior. For the third quarter of 2025, NL recognized an equity in losses of Kronos amounting to $11.3 million. This loss significantly contributed to NL Industries, Inc.'s overall GAAP net loss of $7.8 million for the third quarter of 2025. To be fair, Kronos Worldwide, Inc. itself posted a net loss of $37 million for Q3 2025, and a net loss of $28.1 million for the first nine months of 2025.

The segment requires significant investment to secure future growth, even while it's underperforming. Kronos Worldwide, Inc. is anticipating $15 million in research and development spending for the full year 2025 to enhance product quality. This spending is a clear signal of the need to invest heavily to gain market share when the cycle turns, fitting the mold of a Question Mark needing a strategic push.

The current profitability is definitely low, reflecting the cyclical downturn in the $\text{TiO_2$ market. Kronos reported a loss from operations of $19.2 million for the third quarter of 2025. Still, the potential for a rebound is what keeps this classified as a Question Mark rather than a Dog. When the $\text{TiO_2$ market cycle turns positive, this unit has the potential to generate substantial returns, but it's a high-risk, high-reward situation right now.

Here's a quick look at the key financial performance indicators for the Kronos segment in Q3 2025, which shows the depth of the current trough:

The strategic view here is clear:

• Investment Need: The $15 million R&D spend shows a commitment to investment.
• Cash Consumption: The $11.3 million equity loss in Q3 2025 highlights the current cash drain.
• Market Position: Kronos Worldwide, Inc. is a major player, but its current low market share in a down cycle is the issue.
• Decision Point: NL Industries, Inc. must decide if this investment will quickly convert KRO into a Star, or if it risks becoming a Dog.

Finance: draft the capital allocation plan for the next two quarters, focusing on the Kronos investment tranche, by next Wednesday.