AB SKF (OTCMKTS:SKFRY) & Kaiser Aluminum (NASDAQ:KALU) Critical Review

Kaiser Aluminum (NASDAQ:KALU) and AB SKF (OTCMKTS:SKFRY) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kaiser Aluminum	2.05%	8.03%	2.41%
AB SKF	5.54%	14.26%	7.30%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kaiser Aluminum	$3.02 billion	0.42	$46.80 million	$3.89	20.02
AB SKF	$9.34 billion	1.25	$612.44 million	$1.13	22.74

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

Institutional and Insider Ownership

99.3% of Kaiser Aluminum shares are owned by institutional investors. Comparatively, 0.1% of AB SKF shares are owned by institutional investors. 1.4% of Kaiser Aluminum shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Kaiser Aluminum has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, AB SKF has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Kaiser Aluminum and AB SKF, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kaiser Aluminum	0	2	1	0	2.33
AB SKF	0	2	0	0	2.00

Kaiser Aluminum currently has a consensus price target of $78.00, suggesting a potential upside of 0.17%. Given Kaiser Aluminum’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Kaiser Aluminum is more favorable than AB SKF.

Dividends

Kaiser Aluminum pays an annual dividend of $3.08 per share and has a dividend yield of 4.0%. AB SKF pays an annual dividend of $0.73 per share and has a dividend yield of 2.8%. Kaiser Aluminum pays out 79.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AB SKF pays out 64.6% of its earnings in the form of a dividend.

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.

About AB SKF

AB SKF (publ) designs, manufactures, and sells bearings and units, seals, lubrication systems, condition monitoring, and services worldwide. It operates in two segments, Industrial and Automotive. The company offers rolling, mounted and housings, super-precision, slewing, plain, magnetic, and thin section bearings; industrial and automotive seals; lubricants, manual lubrication tools, lubricators, automatic lubrication systems, and lubrication system components; maintenance products, such as hydraulic, mechanical, and alignment tools, as well as heaters; belts, pulleys, chains, sprockets, bushings and hubs, couplings, and bolts and tightening systems; condition monitoring systems; test and measuring equipment, such as waviness and roundness analyzers, noise and vibration testers, and grease test rigs, as well as calibration with traceability, machine training and support, and upgrades and refurbishment services; and vehicle aftermarket products. It also provides application engineering services consisting of technical consultancy, numerical simulation and design, and root cause analysis; asset management services, such as assessment and benchmarking, maintenance strategy review, spare parts and inventory management, and lubrication management; condition-based maintenance, including vibration analysis and diagnostics, thermography, lubrication analysis, and condition monitoring system installation; mechanical maintenance comprising mounting and dismounting, precision alignment, and balancing; remanufacturing and customization; and training solutions, which include instructor-led training, e-learning courses, and webinar recordings. The company serves the aerospace, agriculture, automotive, construction, food and beverage, general machinery, machine tools, marine, material handling, metals, mining, mineral processing, ocean energy, pulp and paper, railways, and wind industries. AB SKF (publ) was incorporated in 1907 and is headquartered in Gothenburg, Sweden.