Critical Review: Outokumpu (OTCMKTS:OUTKY) vs. ThyssenKrupp (OTCMKTS:TKAMY)

Outokumpu (OTCMKTS:OUTKY) and ThyssenKrupp (OTCMKTS:TKAMY) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outokumpu	$6.19 billion	0.45	-$154.97 million	($0.16)	-18.34
ThyssenKrupp	$36.31 billion	0.23	$514.57 million	$1.08	12.40

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

Dividends

Outokumpu pays an annual dividend of $0.05 per share and has a dividend yield of 1.7%. ThyssenKrupp pays an annual dividend of $0.11 per share and has a dividend yield of 0.8%. Outokumpu pays out -31.3% of its earnings in the form of a dividend. ThyssenKrupp pays out 10.2% 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. Outokumpu is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Outokumpu and ThyssenKrupp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Outokumpu	1	4	1	0	2.00
ThyssenKrupp	1	1	2	2	2.83

Volatility and Risk

Outokumpu has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, ThyssenKrupp has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Outokumpu	-2.55%	-3.97%	-2.43%
ThyssenKrupp	1.83%	9.21%	3.32%

Summary

ThyssenKrupp beats Outokumpu on 11 of the 14 factors compared between the two stocks.

About Outokumpu

Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally. The company operates through three segments: Europe, Americas, and Ferrochrome. It offers cold rolled coils, strips, and sheets; hot rolled coils, strips, and plates; quarto plates; precision strips; and specialized components, such as welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, hardened and customized press plates, suction roll shells, and blancs and disks. The company also provides stainless steel powder which includes Supra 316L, Dura 17-4PH, Ultra 904L, Therma 253MA, Dura 4116, and Ni-free austenitic stainless steel powder; and nickel-based alloys. Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy; marine; and heavy industries. The company was founded in 1910 and is headquartered in Helsinki, Finland.

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.