Head to Head Comparison: Ternium (NYSE:TX) & JFE (OTCMKTS:JFEEF)

JFE (OTCMKTS:JFEEF) and Ternium (NYSE:TX) are both mid-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Volatility & Risk

JFE has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, Ternium has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500.

Insider & Institutional Ownership

12.0% of Ternium shares are held by institutional investors. 0.0% of Ternium shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares JFE and Ternium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JFE	1.49%	2.78%	1.27%
Ternium	3.66%	1.95%	1.35%

Analyst Ratings

This is a breakdown of current recommendations and price targets for JFE and Ternium, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JFE	0	0	0	0	0.00
Ternium	2	2	2	0	2.00

Ternium has a consensus target price of $32.8333, indicating a potential downside of 0.96%. Given Ternium’s stronger consensus rating and higher possible upside, analysts clearly believe Ternium is more favorable than JFE.

Earnings and Valuation

This table compares JFE and Ternium”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JFE	$31.91 billion	0.25	$606.33 million	$0.71	17.59
Ternium	$17.65 billion	0.38	-$53.67 million	$3.03	10.94

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

Summary

Ternium beats JFE on 10 of the 14 factors compared between the two stocks.

About JFE

JFE Holdings, Inc., through its subsidiaries, engages in steel, engineering, and trading businesses in Japan and internationally. Its Steel segment produces and sells various steel products, processed steel products, and raw materials, as well as operates in the transportation, facility maintenance, and construction businesses. The company's Engineering segment handles the engineering of energy, urban environment, steel structures and industrial machinery, recycling, and electricity retailing projects. Its Trading segment purchases, processes, and distributes steel products, raw materials for steel production, nonferrous metal products, food, etc. JFE Holdings, Inc. was incorporated in 2002 and is headquartered in Tokyo, Japan.

About Ternium

Ternium S.A., together with its subsidiaries, manufactures and distributes steel products in Mexico, Southern Region, Brazil, and internationally. It operates through three segments: Steel, Mining, and Usiminas. The Steel segment offers slabs, hot and cold rolled products, coated products, roll formed and tubular products, bars, billets, and other products. Its Mining segment sells iron ore and pellets. The Usiminas segment offers iron ore extraction, steel transformation, and production of capital goods and logistics; and manufactures and sells various products and raw materials, such as flat steel, iron ore, and stamped steel parts for the automotive industry and products for the civil construction and capital goods industry. It also provides medical and social; scrap; renewable energy; and engineering and other services, as well as operates as a distribution company. In addition, the company engages in the exploration, exploitation, and pelletizing of iron ore. Ternium S.A. was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.