Reviewing Alcoa (NYSE:AA) & Mitsui & Co. (OTCMKTS:MITSY)

Alcoa (NYSE:AA) and Mitsui & Co. (OTCMKTS:MITSY) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Dividends

Alcoa pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Mitsui & Co. pays an annual dividend of $5.30 per share and has a dividend yield of 1.3%. Alcoa pays out 12.0% of its earnings in the form of a dividend. Mitsui & Co. pays out 13.2% 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. Alcoa is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Alcoa and Mitsui & Co., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alcoa	1	5	6	0	2.42
Mitsui & Co.	0	0	0	1	4.00

Alcoa presently has a consensus target price of $42.75, suggesting a potential upside of 53.35%. Given Alcoa’s higher probable upside, equities research analysts clearly believe Alcoa is more favorable than Mitsui & Co..

Volatility and Risk

Alcoa has a beta of 2.26, indicating that its share price is 126% more volatile than the S&P 500. Comparatively, Mitsui & Co. has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Profitability

This table compares Alcoa and Mitsui & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alcoa	6.79%	18.56%	7.02%
Mitsui & Co.	6.12%	11.45%	5.28%

Valuation and Earnings

This table compares Alcoa and Mitsui & Co.”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alcoa	$11.90 billion	0.61	$60.00 million	$3.32	8.40
Mitsui & Co.	$96.29 billion	0.60	$5.94 billion	$40.18	10.00

Mitsui & Co. has higher revenue and earnings than Alcoa. Alcoa is trading at a lower price-to-earnings ratio than Mitsui & Co., indicating that it is currently the more affordable of the two stocks.

Summary

Alcoa beats Mitsui & Co. on 9 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 Mitsui & Co.

Mitsui & Co., Ltd. operates as an trading and investment company worldwide. The company engages in the manufacture and sale of steel products; steel processing, maintenance, and recycling activities; investment, development, and trading of mineral and metal resources, as well as resource recycling and industrial developing solutions; and upstream development, logistics, and trading of energy resources, such as natural gas/LNG, oil, coal, and uranium. It also offers power, gas, water, rail, and logistics systems; sales, financing, lease, transportation, and logistics services; and invests in plants, offshore energy development, ships, aviation, space, railways, and automotives, as well as machinery for mining, construction, and industrial use. In addition, the company provides basic chemicals and inorganic raw materials, functional materials, electronic materials, specialty chemicals, housing and lifestyle materials, agri-inputs, animal/human nutrition, and health products; and logistics infrastructures services, including tank terminal operation, as well as plastic recycling and next-generation energy, such as hydrogen and ammonia and forest resources businesses. Further, it engages in the food resources and products, merchandising, retail, fashion and textiles, wellness, healthcare, pharma, hospitality, and human capital businesses. Additionally, it is involved in the ICT, finance, real estate, and logistics businesses. The company was incorporated in 1947 and is headquartered in Tokyo, Japan. Mitsui E&P Italia B operates as a subsidiary of Mitsui & Co., Ltd.