Alcoa (NYSE:AA) and Acerinox (OTCMKTS:ANIOY) Critical Analysis

Acerinox (OTCMKTS:ANIOY) and Alcoa (NYSE:AA) are both materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for Acerinox and Alcoa, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acerinox	1	1	3	1	2.67
Alcoa	2	4	6	0	2.33

Alcoa has a consensus price target of $61.09, indicating a potential upside of 31.35%. Given Alcoa’s higher probable upside, analysts plainly believe Alcoa is more favorable than Acerinox.

Earnings and Valuation

This table compares Acerinox and Alcoa”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acerinox	$6.54 billion	0.78	-$45.34 million	$0.13	78.50
Alcoa	$12.83 billion	0.96	$1.16 billion	$4.86	9.57

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

Volatility & Risk

Acerinox has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Alcoa has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500.

Dividends

Acerinox pays an annual dividend of $0.22 per share and has a dividend yield of 2.2%. Alcoa pays an annual dividend of $0.40 per share and has a dividend yield of 0.9%. Acerinox pays out 169.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alcoa pays out 8.2% of its earnings in the form of a dividend.

Profitability

This table compares Acerinox and Alcoa’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acerinox	0.95%	2.59%	0.93%
Alcoa	9.48%	18.90%	7.71%

Summary

Alcoa beats Acerinox on 11 of the 15 factors compared between the two stocks.

About Acerinox

Acerinox, S.A., together with its subsidiaries, manufactures, process, and markets stainless steel products in Spain, the United States, Africa, Asia, Rest of Europe, and internationally. It operates through Stainless steel, and High-performance Alloys segments. The company offers flat products, including hot and cold rolled coils and sheets, strips, flat bars, and discs, as well as engraved coil and sheet, black coil, slabs, circles, billets, and plates. It provides long products, which include wire and hexagonal wire rods, peeled bars, hot and cold reinforcement bars, black bars, profiles, angles, and steel profiles, as well as stainless steel, color coated, and reinforcement wires. In additions, it offers stainless steel products, such as austenitic, ferritic, duplex, and martensitic. Acerinox, S.A. was incorporated in 1970 and is headquartered in Madrid, Spain.

About Alcoa

Alcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, Canada, and internationally. The company operates through two segments, Alumina and Aluminum. It engages in bauxite mining operations; and processes bauxite into alumina and sells it to customers who process it into industrial chemical products, as well as aluminum smelting and casting businesses. The company offers primary aluminum in the form of alloy ingot or value-add ingot to customers that produce products for the transportation, building and construction, packaging, wire, and other industrial markets; and flat-rolled aluminum in the form of sheet, which is sold primarily to customers that produce beverage and food cans. In addition, it owns hydro power plants that generates and sells electricity in the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in October 2016. The company was founded in 1886 and is headquartered in Pittsburgh, Pennsylvania.