Head to Head Review: Outokumpu (OTCMKTS:OUTKY) and Acerinox (OTCMKTS:ANIOY)

Acerinox (OTCMKTS:ANIOY) and Outokumpu (OTCMKTS:OUTKY) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Dividends

Acerinox pays an annual dividend of $0.22 per share and has a dividend yield of 3.5%. Outokumpu pays an annual dividend of $0.04 per share and has a dividend yield of 2.0%. Acerinox pays out 57.9% of its earnings in the form of a dividend. Outokumpu pays out -100.0% 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.

Volatility and Risk

Acerinox has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Outokumpu has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Acerinox and Outokumpu, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acerinox	0	1	2	0	2.67
Outokumpu	1	1	0	0	1.50

Profitability

This table compares Acerinox and Outokumpu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acerinox	3.34%	7.07%	2.83%
Outokumpu	-0.57%	-0.92%	-0.56%

Valuation & Earnings

This table compares Acerinox and Outokumpu”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acerinox	$5.86 billion	0.53	$243.41 million	$0.38	16.38
Outokumpu	$6.43 billion	0.31	-$43.28 million	($0.04)	-50.75

Acerinox has higher earnings, but lower revenue than Outokumpu. Outokumpu is trading at a lower price-to-earnings ratio than Acerinox, indicating that it is currently the more affordable of the two stocks.

Summary

Acerinox beats Outokumpu on 11 of the 13 factors compared between the two stocks.

About Acerinox

Acerinox, S.A., together with its subsidiaries, manufactures, process, and markets stainless steel products in Spain, the United States, Africa, Asia, Rest of Europe, and internationally. It operates through Stainless steel, and High-performance Alloys segments. The company offers flat products, including hot and cold rolled coils and sheets, strips, flat bars, and discs, as well as engraved coil and sheet, black coil, slabs, circles, billets, and plates. It provides long products, which include wire and hexagonal wire rods, peeled bars, hot and cold reinforcement bars, black bars, profiles, angles, and steel profiles, as well as stainless steel, color coated, and reinforcement wires. In additions, it offers stainless steel products, such as austenitic, ferritic, duplex, and martensitic. Acerinox, S.A. was incorporated in 1970 and is headquartered in Madrid, Spain.

About Outokumpu

Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally. The company operates through three segments: Europe, Americas, and Ferrochrome. It offers cold rolled coils, strips, and sheets; hot rolled coils, strips, and plates; quarto plates; precision strips; and specialized components, such as welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, hardened and customized press plates, suction roll shells, and blancs and disks. The company also provides stainless steel powder which includes Supra 316L, Dura 17-4PH, Ultra 904L, Therma 253MA, Dura 4116, and Ni-free austenitic stainless steel powder; and nickel-based alloys. Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy; marine; and heavy industries. The company was founded in 1910 and is headquartered in Helsinki, Finland.