Allegheny Technologies (NYSE: ATI) and Aqua Metals (NASDAQ:AQMS) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Risk and Volatility

Allegheny Technologies has a beta of 2.44, indicating that its share price is 144% more volatile than the S&P 500. Comparatively, Aqua Metals has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Valuation & Earnings

This table compares Allegheny Technologies and Aqua Metals’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Allegheny Technologies $3.13 billion 0.78 -$640.90 million ($0.78) -28.62
Aqua Metals N/A N/A -$13.55 million ($1.29) -2.37

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

Analyst Ratings

This is a summary of current recommendations for Allegheny Technologies and Aqua Metals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegheny Technologies 0 5 3 0 2.38
Aqua Metals 0 0 6 0 3.00

Allegheny Technologies currently has a consensus target price of $20.57, suggesting a potential downside of 7.83%. Aqua Metals has a consensus target price of $28.60, suggesting a potential upside of 834.64%. Given Aqua Metals’ stronger consensus rating and higher probable upside, analysts plainly believe Aqua Metals is more favorable than Allegheny Technologies.

Profitability

This table compares Allegheny Technologies and Aqua Metals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegheny Technologies -2.45% 1.09% 0.31%
Aqua Metals N/A -38.57% -30.40%

Institutional and Insider Ownership

38.9% of Aqua Metals shares are held by institutional investors. 1.1% of Allegheny Technologies shares are held by insiders. Comparatively, 19.7% of Aqua Metals shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Aqua Metals beats Allegheny Technologies on 7 of the 12 factors compared between the two stocks.

Allegheny Technologies Company Profile

Allegheny Technologies Incorporated is a manufacturer of specialty materials and complex components. The Company operates through two business segments: High Performance Materials & Components (HPMC), and Flat Rolled Products (FRP). The HPMC segment produces, converts and distributes a range of materials, including titanium and titanium-based alloys, nickel- and cobalt-based alloys and superalloys, zirconium and related alloys, including hafnium and niobium, advanced powder alloys and other specialty materials, in long product forms, such as ingot, billet, bar, rod, wire, shapes and rectangles, and seamless tubes, plus precision forgings, castings, components and machined parts. The FRP segment produces, converts and distributes stainless steel, nickel-based alloys, specialty alloys, and titanium and titanium-based alloys, in a range of product forms, including plate, sheet, engineered strip, and Precision Rolled Strip products.

Aqua Metals Company Profile

Aqua Metals, Inc. is engaged in the business of recycling lead through a process that the Company developed and named AquaRefining. The Company’s AquaRefining process focuses on providing for the recycling of lead acid batteries (LABs) and the production of lead. AquaRefining uses bio-degradable aqueous solvent and an ambient temperature electro-chemical process to produce lead. The modular nature of AquaRefining makes it possible to start LAB recycling at a much smaller scale than is possible with smelters. Its AquaRefining process begins with the crushing of used LABs and the separation of the metallic lead, active material (lead compounds), sulfuric acid and plastic for recycling. The active material is dissolved in its solvent. The primary lead is then stripped from the solvent using its automated process allowing the solvent to be reused continuously and indefinitely. As of December 31, 2016, the Company had not generated revenues.

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