Contrasting Kaiser Aluminum (NASDAQ:KALU) and Highway (NASDAQ:HIHO)

Kaiser Aluminum (NASDAQ:KALU) and Highway (NASDAQ:HIHO) are both small-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kaiser Aluminum	1.43%	7.02%	2.06%
Highway	1.43%	1.63%	1.01%

Volatility and Risk

Kaiser Aluminum has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, Highway has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500.

Earnings and Valuation

This table compares Kaiser Aluminum and Highway”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kaiser Aluminum	$3.02 billion	0.46	$46.80 million	$2.67	32.07
Highway	$7.41 million	0.89	$110,000.00	$0.02	75.30

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Kaiser Aluminum and Highway, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kaiser Aluminum	0	2	1	0	2.33
Highway	0	0	0	0	0.00

Kaiser Aluminum currently has a consensus target price of $69.00, suggesting a potential downside of 19.41%. Given Kaiser Aluminum’s stronger consensus rating and higher possible upside, analysts clearly believe Kaiser Aluminum is more favorable than Highway.

Insider & Institutional Ownership

99.3% of Kaiser Aluminum shares are owned by institutional investors. Comparatively, 13.2% of Highway shares are owned by institutional investors. 1.4% of Kaiser Aluminum shares are owned by company insiders. Comparatively, 32.1% of Highway 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.

Dividends

Kaiser Aluminum pays an annual dividend of $3.08 per share and has a dividend yield of 3.6%. Highway pays an annual dividend of $0.07 per share and has a dividend yield of 4.6%. Kaiser Aluminum pays out 115.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Highway pays out 350.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Kaiser Aluminum beats Highway on 11 of the 15 factors compared between the two stocks.

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 Highway

Highway Holdings Limited, together with its subsidiaries, manufactures and supplies metal, plastic, electric, and electronic components, subassemblies, and finished products for original equipment manufacturers (OEMs) and contract manufacturers. It operates through two segments, Metal Stamping and Mechanical OEM; and Electric OEM. The company also trades in plastic injection products; and manufactures and assembles automation equipment. Its products are used in the manufacture of products, such as photocopiers, laser printers, print cartridges, electrical connectors, electrical circuits, vacuum cleaners, LED power supplies, stepping motors, pumps for dishwashers, and other washing machine components. In addition, the company assists customers in the design and development of the tooling used in the metal and plastic manufacturing process, as well as provides an array of other manufacturing and engineering services, including metal stamping, screen printing, plastic injection molding, pad printing, and electronic assembly of printed circuit boards. It operates in Hong Kong and China, Europe, North America, and other Asian countries. Highway Holdings Limited was incorporated in 1990 and is headquartered in Sheung Shui, Hong Kong.