Materion (MTRN) vs. Allegheny Technologies (ATI) Critical Comparison

Materion (NYSE: MTRN) and Allegheny Technologies (NYSE:ATI) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Dividends

Materion pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. Allegheny Technologies does not pay a dividend. Materion pays out 30.8% of its earnings in the form of a dividend. Allegheny Technologies has raised its dividend for 4 consecutive years.

Profitability

This table compares Materion and Allegheny Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Materion 2.48% 6.08% 3.96%
Allegheny Technologies -2.45% 1.09% 0.31%

Institutional and Insider Ownership

90.0% of Materion shares are held by institutional investors. 2.9% of Materion shares are held by company insiders. Comparatively, 1.1% of Allegheny Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Materion and Allegheny Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Materion 0 2 0 0 2.00
Allegheny Technologies 0 5 3 0 2.38

Materion currently has a consensus price target of $36.00, suggesting a potential downside of 25.93%. Allegheny Technologies has a consensus price target of $20.57, suggesting a potential downside of 7.00%. Given Allegheny Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe Allegheny Technologies is more favorable than Materion.

Volatility & Risk

Materion has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Allegheny Technologies has a beta of 2.38, suggesting that its stock price is 138% more volatile than the S&P 500.

Earnings and Valuation

This table compares Materion and Allegheny Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Materion $969.24 million 1.00 $25.74 million $1.30 37.38
Allegheny Technologies $3.13 billion 0.77 -$640.90 million ($0.78) -28.36

Materion has higher earnings, but lower revenue than Allegheny Technologies. Allegheny Technologies is trading at a lower price-to-earnings ratio than Materion, indicating that it is currently the more affordable of the two stocks.

Summary

Materion beats Allegheny Technologies on 9 of the 17 factors compared between the two stocks.

About Materion

Materion Corporation, through its subsidiaries, is an integrated producer of engineered materials used in a range of electrical, electronic, thermal, and structural applications. The Company operates in four segments: Performance Alloys and Composites, Advanced Materials, Precision Coatings, and Other. The Performance Alloys and Composites segment consists of businesses, such as Performance Metals and Technical Materials. The Advanced Materials segment produces chemicals, microelectronics packaging, precious metal, non-precious metal and specialty metal products. The Precision Coatings segment includes units, such as Precision Optics and Large Area Coatings. Its products include inorganic chemicals and powders, specialty coatings, specialty engineered beryllium and copper-based alloys, beryllium composites, ceramics and engineered clad, and plated metal systems.

About Allegheny Technologies

Allegheny Technologies Incorporated is a manufacturer of specialty materials and complex components. The Company operates through two business segments: High Performance Materials & Components (HPMC), and Flat Rolled Products (FRP). The HPMC segment produces, converts and distributes a range of materials, including titanium and titanium-based alloys, nickel- and cobalt-based alloys and superalloys, zirconium and related alloys, including hafnium and niobium, advanced powder alloys and other specialty materials, in long product forms, such as ingot, billet, bar, rod, wire, shapes and rectangles, and seamless tubes, plus precision forgings, castings, components and machined parts. The FRP segment produces, converts and distributes stainless steel, nickel-based alloys, specialty alloys, and titanium and titanium-based alloys, in a range of product forms, including plate, sheet, engineered strip, and Precision Rolled Strip products.

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