Reviewing Aperam (OTCMKTS:APEMY) & Outokumpu (OTCMKTS:OUTKY)

Aperam (OTCMKTS:APEMY) and Outokumpu (OTCMKTS:OUTKY) are both mid-cap basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Aperam	3.11%	1.72%	0.92%
Outokumpu	-0.82%	-1.33%	-0.82%

Dividends

Aperam pays an annual dividend of $1.97 per share and has a dividend yield of 5.4%. Outokumpu pays an annual dividend of $0.05 per share and has a dividend yield of 2.2%. Aperam pays out 68.2% 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.

Earnings and Valuation

This table compares Aperam and Outokumpu”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aperam	$6.77 billion	0.40	$249.96 million	$2.89	12.67
Outokumpu	$6.43 billion	0.33	-$43.28 million	($0.05)	-45.00

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aperam	0	3	0	0	2.00
Outokumpu	2	1	1	0	1.75

Volatility & Risk

Aperam has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, Outokumpu has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Summary

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

About Aperam

Aperam S.A., together with its subsidiaries, produces and sells stainless and specialty steel products worldwide. It operates through four segments: Stainless & Electrical Steel; Services & Solutions; Alloys & Specialties; and Recycling & Renewables. The company offers a range of stainless steel products, including grain oriented and non-grain oriented electrical steel products, and specialty alloys. It is also involved in the management of direct sales of stainless steel products from production facilities; distribution of its products; and the provision of transformation services that include value added and customized steel solutions. In addition, the company designs, produces, and transforms various specialty alloys and other specific stainless steels in forms, such as bars, semis, cold-rolled strips, wire and wire rods, and plates in a range on grades. Further, it engages in the trading, processing, and recycling of raw materials, such as superalloys and titanium; provides Recyco, an electric arc furnace recycling facility that retrieves dust and sludge to recycle stainless steel raw materials and reduce waste; and produces wood and charcoal from cultivated eucalyptus forests. The company serves customers in aerospace, automotive, catering, construction, household appliances, electrical engineering, industrial processes, medical, and oil and gas industries. It distributes its products through a network of steel service centers, transformation facilities, and sales offices. The company was incorporated in 2010 and is headquartered in Luxembourg, Luxembourg.

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.