Contrasting Algoma Steel Group (NASDAQ:ASTL) & DPM Metals (OTCMKTS:DPMLF)

Algoma Steel Group (NASDAQ:ASTL) and DPM Metals (OTCMKTS:DPMLF) are both materials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Volatility and Risk

Algoma Steel Group has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, DPM Metals has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Earnings and Valuation

This table compares Algoma Steel Group and DPM Metals”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Algoma Steel Group	$1.54 billion	0.28	-$704.89 million	($7.35)	-0.56
DPM Metals	$950.48 million	9.78	$369.23 million	$3.04	13.95

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

Profitability

This table compares Algoma Steel Group and DPM Metals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Algoma Steel Group	-71.60%	-110.49%	-25.74%
DPM Metals	50.26%	25.66%	21.67%

Insider & Institutional Ownership

72.0% of Algoma Steel Group shares are held by institutional investors. 7.8% of Algoma Steel Group shares are held by insiders. Comparatively, 0.3% of DPM Metals shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Algoma Steel Group pays an annual dividend of $0.05 per share and has a dividend yield of 1.2%. DPM Metals pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Algoma Steel Group pays out -0.7% of its earnings in the form of a dividend. DPM Metals pays out 5.3% 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. Algoma Steel Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and price targets for Algoma Steel Group and DPM Metals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Algoma Steel Group	1	3	0	0	1.75
DPM Metals	0	2	3	0	2.60

Summary

DPM Metals beats Algoma Steel Group on 9 of the 15 factors compared between the two stocks.

About Algoma Steel Group

Algoma Steel Group Inc. produces and sells steel products primarily in North America. The company provides flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural product manufacturers, and the light manufacturing and transportation industries; and plate steel products that consist of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, and military applications. Algoma Steel Group Inc. was founded in 1901 and is headquartered in Sault Ste. Marie, Canada.

About DPM Metals

Dundee Precious Metals Inc., a gold mining company, engages in the acquisition, exploration, development, mining, and processing of precious metals. The company primarily explores for gold, copper, and silver deposits. It holds a portfolio of projects located in Bulgaria, Namibia, Serbia, and Ecuador. The company is based in Toronto, Canada.