Head to Head Contrast: ThyssenKrupp (OTCMKTS:TKAMY) and Alcoa (NYSE:AA)

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ThyssenKrupp	2	1	3	2	2.62
Alcoa	1	6	6	0	2.38

Alcoa has a consensus price target of $58.23, indicating a potential upside of 48.02%. Given Alcoa’s higher probable upside, analysts clearly believe Alcoa is more favorable than ThyssenKrupp.

Risk & Volatility

ThyssenKrupp has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, Alcoa has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ThyssenKrupp	0.89%	5.85%	2.14%
Alcoa	10.77%	24.58%	10.03%

Valuation & Earnings

This table compares ThyssenKrupp and Alcoa”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ThyssenKrupp	$36.31 billion	0.26	$514.57 million	$0.54	28.33
Alcoa	$12.83 billion	0.81	$1.16 billion	$5.79	6.79

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

Dividends

ThyssenKrupp pays an annual dividend of $0.11 per share and has a dividend yield of 0.7%. Alcoa pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. ThyssenKrupp pays out 20.4% of its earnings in the form of a dividend. Alcoa pays out 6.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Alcoa is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

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

About ThyssenKrupp

thyssenkrupp AG operates as an industrial and technology company in Germany and internationally. It operates through five segments: Automotive Technology, Decarbon Technologies, Materials Services, Steel Europe, and Marine Systems. The Automotive Technology segment offers components, systems, and automation solutions for vehicle manufacturing, such as axle assembly, body in white, camshafts and electric engine components, dampers, dies, springs and stabilizers, crankshafts and conrods, steering, and undercarriages. The Decarbon Technologies segment provides slewing bearings and rings, green ammonia and methanol, chemical and cement plants, high pressure processing, and refinery services, as well as green hydrogen. The Marine System segment manufactures submarines, naval services, and naval surface vessels. The Material Services segment offers 3D-printing/additive manufacturing, alloys, infrastructure project and services, industrial minerals, logistics services, metals, nonferrous metals, plastics, rolled steel, special ores, and stainless steel. The Steel Europe segment manufactures composite materials, electrical steel, hot strips, organic coated strips and sheet, packaging steel, precision steel strip, and sheet and coated products. thyssenkrupp AG was founded in 1811 and is headquartered in Essen, Germany.

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.