Acerinox (OTCMKTS:ANIOY) & Alcoa (NYSE:AA) Financial Analysis

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

Volatility & Risk

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

Profitability

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

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

Dividends

Alcoa pays an annual dividend of $0.40 per share and has a dividend yield of 0.9%. Acerinox pays an annual dividend of $0.22 per share and has a dividend yield of 2.2%. Alcoa pays out 8.2% of its earnings in the form of a dividend. 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.

Analyst Recommendations

This is a summary of current ratings for Alcoa and Acerinox, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alcoa	1	5	6	0	2.42
Acerinox	1	1	3	1	2.67

Alcoa currently has a consensus target price of $60.09, indicating a potential upside of 34.34%. Given Alcoa’s higher possible upside, equities research analysts plainly believe Alcoa is more favorable than Acerinox.

Valuation & Earnings

This table compares Alcoa and Acerinox”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alcoa	$12.83 billion	0.92	$1.16 billion	$4.86	9.20
Acerinox	$6.54 billion	0.75	-$45.34 million	$0.13	76.15

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.

Summary

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

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.

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.