Analyzing Norsk Hydro ASA (OTCMKTS:NHYDY) and Nexa Resources (NYSE:NEXA)

Norsk Hydro ASA (OTCMKTS:NHYDY) and Nexa Resources (NYSE:NEXA) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Valuation & Earnings

This table compares Norsk Hydro ASA and Nexa Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norsk Hydro ASA	$19.41 billion	0.67	$538.47 million	$0.52	12.72
Nexa Resources	$2.77 billion	0.26	-$205.03 million	($0.12)	-45.42

Norsk Hydro ASA has higher revenue and earnings than Nexa Resources. Nexa Resources is trading at a lower price-to-earnings ratio than Norsk Hydro ASA, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Norsk Hydro ASA has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500. Comparatively, Nexa Resources has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Profitability

This table compares Norsk Hydro ASA and Nexa Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norsk Hydro ASA	4.96%	10.39%	5.43%
Nexa Resources	-0.57%	-8.80%	-2.08%

Dividends

Norsk Hydro ASA pays an annual dividend of $0.15 per share and has a dividend yield of 2.3%. Nexa Resources pays an annual dividend of $0.10 per share and has a dividend yield of 1.8%. Norsk Hydro ASA pays out 28.8% of its earnings in the form of a dividend. Nexa Resources pays out -83.3% 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Norsk Hydro ASA and Nexa Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norsk Hydro ASA	0	6	1	0	2.14
Nexa Resources	3	5	0	0	1.63

Nexa Resources has a consensus price target of $6.29, indicating a potential upside of 15.33%. Given Nexa Resources’ higher possible upside, analysts plainly believe Nexa Resources is more favorable than Norsk Hydro ASA.

Insider and Institutional Ownership

0.0% of Norsk Hydro ASA shares are held by institutional investors. 0.0% of Norsk Hydro ASA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Norsk Hydro ASA beats Nexa Resources on 14 of the 16 factors compared between the two stocks.

About Norsk Hydro ASA

Norsk Hydro ASA engages in the power production, bauxite extraction, alumina refining, aluminium smelting, and recycling activities; and provision of extruded solutions worldwide. It operates through Hydro Bauxite & Alumina, Hydro Aluminium Metal, Hydro Metal Markets, Hydro Extrusions, and Hydro Energy segments. The Hydro Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, primarily the sale of alumina. The Hydro Aluminium Metal segment is involved in the primary aluminum production casting activities. This segment principally offers extrusion ingots, foundry alloys, and sheet and standard ingots. The Metal Markets segment sells products from the company’s primary metal plants; operates recyclers; and trades in physical and financial metals. The Hydro Extrusions segment offers extrusion profiles, building systems, and precision tubing products for construction, automotive and heating, and ventilation and air conditioning sectors, as well as operates recycling facilities. The Hydro Energy segment engages in the trading and wholesale business in Brazil; energy sourcing operations; and operation of power stations in Norway, as well as renewable energy production, such as wind and solar, battery materials, and green hydrogen. Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.

About Nexa Resources

Nexa Resources S.A., together with its subsidiaries, engages in the zinc mining and smelting business worldwide. The company operates in two segments, Mining and Smelting. It produces zinc, zamac, zinc oxide, and zincal, as well as by-products, such as copper, lead, silver, gold, copper sulfate, sulfuric acid, copper cementum, silver concentrate, slag aggregates, and cadmium/sponge deposits. The company owns and operates six polymetallic mines, including three located in the Central Andes of Peru; two located in the State of Minas Gerais in Brazil; and one located in the State of Mato Grosso in Brazil. It also owns and operates three zinc smelters comprising one located in Cajamarquilla in Peru; and two located in the State of Minas Gerais in Brazil, which recovers and produces metallic zinc, zinc oxide, and by-products, such as sulfuric acid. The company also exports its products. Its products are used in civil construction, transportation, energy, agriculture, health, and consumer goods industries. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is based in Luxembourg, Luxembourg. Nexa Resources S.A. operates as a subsidiary of Votorantim S.A.