Critical Contrast: Nucor (NYSE:NUE) versus Nexa Resources (NYSE:NEXA)

Nexa Resources (NYSE:NEXA) and Nucor (NYSE:NUE) are both materials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Volatility & Risk

Nexa Resources has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Nucor has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500.

Insider & Institutional Ownership

76.5% of Nucor shares are owned by institutional investors. 0.6% of Nucor shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Nexa Resources and Nucor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nexa Resources	8.02%	20.25%	5.28%
Nucor	7.99%	12.73%	8.03%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Nexa Resources and Nucor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nexa Resources	1	6	0	0	1.86
Nucor	0	3	13	0	2.81

Nexa Resources currently has a consensus price target of $14.60, suggesting a potential upside of 2.19%. Nucor has a consensus price target of $272.38, suggesting a potential upside of 5.96%. Given Nucor’s stronger consensus rating and higher possible upside, analysts plainly believe Nucor is more favorable than Nexa Resources.

Earnings & Valuation

This table compares Nexa Resources and Nucor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nexa Resources	$3.00 billion	0.63	$132.63 million	$2.09	6.84
Nucor	$32.49 billion	1.79	$1.74 billion	$12.54	20.50

Nucor has higher revenue and earnings than Nexa Resources. Nexa Resources is trading at a lower price-to-earnings ratio than Nucor, indicating that it is currently the more affordable of the two stocks.

Summary

Nucor beats Nexa Resources on 12 of the 14 factors compared between the two stocks.

About Nexa Resources

Nexa Resources S.A., together with its subsidiaries, engages in the zinc mining and smelting business worldwide. The company operates in two segments, Mining and Smelting. It produces zinc, zamac, zinc oxide, and zincal, as well as by-products, such as copper, lead, silver, gold, copper sulfate, sulfuric acid, copper cementum, silver concentrate, slag aggregates, and cadmium/sponge deposits. The company owns and operates six polymetallic mines, including three located in the Central Andes of Peru; two located in the State of Minas Gerais in Brazil; and one located in the State of Mato Grosso in Brazil. It also owns and operates three zinc smelters comprising one located in Cajamarquilla in Peru; and two located in the State of Minas Gerais in Brazil, which recovers and produces metallic zinc, zinc oxide, and by-products, such as sulfuric acid. The company also exports its products. Its products are used in civil construction, transportation, energy, agriculture, health, and consumer goods industries. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is based in Luxembourg, Luxembourg. Nexa Resources S.A. operates as a subsidiary of Votorantim S.A.

About Nucor

Nucor Corporation engages in manufacture and sale of steel and steel products. It operates in three segments: steel mills, steel products, and raw materials. The Steel Mills segment produces hot-rolled, cold-rolled, and galvanized sheet steel products; plate steel products; wide-flange beams, beam blanks, and H-piling and sheet piling structural steel products; bar steel products, such as blooms, billets, concrete reinforcing and merchant bars, and engineered special bar quality products; and engages in the steel trading and rebar distribution businesses. This segment sells its products to steel service centers, fabricators, and manufacturers in the United States, Canada, and Mexico. The Steel Products segment offers steel joists and joist girders, steel decks, and galvanized torque tubes for used in solar arrays, hollow structural section steel tubing, electrical conduit, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, steel grating and expanded metal, wire and wire mesh, metal building systems, insulated metal panels, steel racking, overhead doors, and utility towers and structures for communications and energy transmission. This segment is also involved in the piling distribution business. The Raw Materials segment produces direct reduced iron (DRI); brokers ferrous and nonferrous metals, pig iron, hot briquetted iron, and DRI; supplies ferro-alloys; processes ferrous and nonferrous scrap metal; and engages in the natural gas production and industrial gas business. This segment sells its ferrous scrap to electric arc furnace steel mills and foundries for manufacturing process; and nonferrous scrap metal to aluminum can producers, secondary aluminum smelters, steel mills and other processors, and consumers of various nonferrous metals. It markets its products through in-house sales force; and internal distribution and trading companies. Nucor Corporation was founded in 1905 and is headquartered in Charlotte, North Carolina.