Critical Analysis: Aperam (OTCMKTS:APEMY) & JFE (OTCMKTS:JFEEF)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
JFE	1.63%	2.94%	1.33%
Aperam	-0.13%	0.47%	0.25%

Valuation and Earnings

This table compares JFE and Aperam”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JFE	$31.91 billion	0.24	$606.33 million	$0.76	16.05
Aperam	$6.77 billion	0.41	$249.96 million	($0.12)	-319.58

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

Analyst Recommendations

This is a breakdown of recent recommendations for JFE and Aperam, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JFE	0	0	0	0	0.00
Aperam	0	4	0	0	2.00

Volatility and Risk

JFE has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Aperam has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Summary

JFE beats Aperam on 7 of the 10 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 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.