Acerinox (OTCMKTS:ANIOY) versus Algoma Steel Group (NASDAQ:ASTL) Financial Analysis

Algoma Steel Group (NASDAQ:ASTL) and Acerinox (OTCMKTS:ANIOY) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Risk and Volatility

Algoma Steel Group has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, Acerinox has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Algoma Steel Group and Acerinox, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Algoma Steel Group	1	5	0	0	1.83
Acerinox	1	1	2	0	2.25

Dividends

Algoma Steel Group pays an annual dividend of $0.05 per share and has a dividend yield of 1.2%. Acerinox pays an annual dividend of $0.22 per share and has a dividend yield of 3.0%. Algoma Steel Group pays out -0.7% of its earnings in the form of a dividend. Acerinox pays out -244.4% 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. Acerinox is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

72.0% of Algoma Steel Group shares are owned by institutional investors. 7.8% of Algoma Steel Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Algoma Steel Group and Acerinox”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Algoma Steel Group	$1.49 billion	0.29	-$704.89 million	($6.72)	-0.62
Acerinox	$6.54 billion	0.56	-$45.25 million	($0.09)	-81.44

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

Profitability

This table compares Algoma Steel Group and Acerinox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Algoma Steel Group	-47.61%	-42.31%	-16.52%
Acerinox	-0.72%	-1.92%	-0.70%

Summary

Acerinox beats Algoma Steel Group on 11 of the 15 factors compared between the two stocks.

About Algoma Steel Group

Algoma Steel Group Inc. produces and sells steel products primarily in North America. The company provides flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural product manufacturers, and the light manufacturing and transportation industries; and plate steel products that consist of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, and military applications. Algoma Steel Group Inc. was founded in 1901 and is headquartered in Sault Ste. Marie, Canada.

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.