Critical Comparison: Materion Corporation (MTRN) & Allegheny Technologies (ATI)

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

Analyst Ratings

This is a summary of current recommendations and price targets for Materion Corporation and Allegheny Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Materion Corporation 0 2 0 0 2.00
Allegheny Technologies 0 3 1 0 2.25

Materion Corporation currently has a consensus target price of $36.00, suggesting a potential downside of 28.71%. Allegheny Technologies has a consensus target price of $21.00, suggesting a potential downside of 2.91%. Given Allegheny Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe Allegheny Technologies is more favorable than Materion Corporation.

Earnings and Valuation

This table compares Materion Corporation and Allegheny Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Materion Corporation $969.24 million 1.04 $25.74 million $1.30 38.85
Allegheny Technologies $3.13 billion 0.75 -$640.90 million ($0.78) -27.73

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

Profitability

This table compares Materion Corporation and Allegheny Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Materion Corporation 2.48% 6.08% 3.96%
Allegheny Technologies -2.45% 1.09% 0.31%

Risk & Volatility

Materion Corporation has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Allegheny Technologies has a beta of 2.44, suggesting that its stock price is 144% more volatile than the S&P 500.

Insider and Institutional Ownership

88.9% of Materion Corporation shares are owned by institutional investors. 2.9% of Materion Corporation shares are owned by company insiders. Comparatively, 1.1% of Allegheny Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Materion Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. Allegheny Technologies does not pay a dividend. Materion Corporation pays out 30.8% of its earnings in the form of a dividend. Allegheny Technologies has raised its dividend for 4 consecutive years.

Summary

Materion Corporation beats Allegheny Technologies on 9 of the 17 factors compared between the two stocks.

About Materion Corporation

Materion Corporation, through its subsidiaries, is an integrated producer of engineered materials used in a range of electrical, electronic, thermal, and structural applications. The Company operates in four segments: Performance Alloys and Composites, Advanced Materials, Precision Coatings, and Other. The Performance Alloys and Composites segment consists of businesses, such as Performance Metals and Technical Materials. The Advanced Materials segment produces chemicals, microelectronics packaging, precious metal, non-precious metal and specialty metal products. The Precision Coatings segment includes units, such as Precision Optics and Large Area Coatings. Its products include inorganic chemicals and powders, specialty coatings, specialty engineered beryllium and copper-based alloys, beryllium composites, ceramics and engineered clad, and plated metal systems.

About Allegheny Technologies

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.

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