Critical Comparison: Kaiser Aluminum (NASDAQ:KALU) versus Aperam (OTCMKTS:APEMY)

Aperam (OTCMKTS:APEMY) and Kaiser Aluminum (NASDAQ:KALU) are both mid-cap materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Volatility & Risk

Aperam has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Kaiser Aluminum has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500.

Insider and Institutional Ownership

99.3% of Kaiser Aluminum shares are owned by institutional investors. 0.2% of Aperam shares are owned by insiders. Comparatively, 1.3% of Kaiser Aluminum shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Aperam and Kaiser Aluminum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aperam	2.10%	2.34%	1.17%
Kaiser Aluminum	5.49%	24.71%	7.86%

Dividends

Aperam pays an annual dividend of $1.96 per share and has a dividend yield of 3.8%. Kaiser Aluminum pays an annual dividend of $3.08 per share and has a dividend yield of 2.0%. Aperam pays out 97.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kaiser Aluminum pays out 22.8% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Aperam and Kaiser Aluminum, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aperam	1	2	3	1	2.57
Kaiser Aluminum	1	1	3	1	2.67

Kaiser Aluminum has a consensus target price of $167.25, indicating a potential upside of 9.68%. Given Kaiser Aluminum’s stronger consensus rating and higher possible upside, analysts plainly believe Kaiser Aluminum is more favorable than Aperam.

Earnings and Valuation

This table compares Aperam and Kaiser Aluminum”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aperam	$6.88 billion	0.55	$10.18 million	$2.02	25.37
Kaiser Aluminum	$4.14 billion	0.60	$112.50 million	$13.49	11.30

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

Summary

Kaiser Aluminum beats Aperam on 12 of the 15 factors compared between the two stocks.

About Aperam

Aperam S.A., together with its subsidiaries, produces and sells stainless and specialty steel products worldwide. It operates through four segments: Stainless & Electrical Steel; Services & Solutions; Alloys & Specialties; and Recycling & Renewables. The company offers a range of stainless steel products, including grain oriented and non-grain oriented electrical steel products, and specialty alloys. It is also involved in the management of direct sales of stainless steel products from production facilities; distribution of its products; and the provision of transformation services that include value added and customized steel solutions. In addition, the company designs, produces, and transforms various specialty alloys and other specific stainless steels in forms, such as bars, semis, cold-rolled strips, wire and wire rods, and plates in a range on grades. Further, it engages in the trading, processing, and recycling of raw materials, such as superalloys and titanium; provides Recyco, an electric arc furnace recycling facility that retrieves dust and sludge to recycle stainless steel raw materials and reduce waste; and produces wood and charcoal from cultivated eucalyptus forests. The company serves customers in aerospace, automotive, catering, construction, household appliances, electrical engineering, industrial processes, medical, and oil and gas industries. It distributes its products through a network of steel service centers, transformation facilities, and sales offices. The company was incorporated in 2010 and is headquartered in Luxembourg, Luxembourg.

About Kaiser Aluminum

Kaiser Aluminum Corporation, together with its subsidiaries, engages in manufacture and sale of semi-fabricated specialty aluminum mill products in the United States and internationally. It offers rolled, extruded, and drawn aluminum products used for aerospace and defense, aluminum beverage and food packaging, automotive and general engineering products. The company's automotive extrusions include extruded aluminum products for structural components, crash management systems, anti-lock braking systems, and drawn tubes for drive shafts, as well as offers fabrication services, including sawing and cutting to length. Its packaging products consist of bare and coated 3000- and 5000-series alloy aluminum coil used for beverage and food packaging industry. In addition, the company's general engineering products comprise alloy plate, sheet, rod, bar, tube, wire, and standard extrusion shapes used in various applications, including the production of military vehicles, ordnances, semiconductor manufacturing cells, electronic devices, after-market motor sport parts, tooling plates, parts for machinery and equipment, bolts, screws, nails, and rivets. Further, its rerolled, extruded, drawn, and cast billet aluminum products used for industrial end uses. The company sells its products directly to customers through sales personnel located in the United States, Canada, Western Europe, and China, as well as through independent sales agents in other regions of Asia, Latin America, and the Middle East. Kaiser Aluminum Corporation was founded in 1946 and is headquartered in Franklin, Tennessee.