Head to Head Review: Alumina (AWCMY) versus Ferroglobe (GSM)

Alumina (OTCMKTS: AWCMY) and Ferroglobe (NASDAQ:GSM) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Earnings and Valuation

This table compares Alumina and Ferroglobe’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alumina $600,000.00 9,461.43 $339.80 million N/A N/A
Ferroglobe $1.74 billion 1.03 $25.17 million $0.13 80.38

Alumina has higher earnings, but lower revenue than Ferroglobe.

Risk and Volatility

Alumina has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, Ferroglobe has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Alumina and Ferroglobe, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alumina 0 0 1 0 3.00
Ferroglobe 0 0 5 0 3.00

Ferroglobe has a consensus price target of $20.50, suggesting a potential upside of 96.17%. Given Ferroglobe’s higher possible upside, analysts plainly believe Ferroglobe is more favorable than Alumina.

Profitability

This table compares Alumina and Ferroglobe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alumina N/A N/A N/A
Ferroglobe 1.45% 2.32% 1.02%

Insider and Institutional Ownership

0.2% of Alumina shares are held by institutional investors. Comparatively, 41.2% of Ferroglobe shares are held by institutional investors. 1.0% of Alumina shares are held by company insiders. Comparatively, 13.1% of Ferroglobe 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.

Dividends

Alumina pays an annual dividend of $0.73 per share and has a dividend yield of 9.3%. Ferroglobe does not pay a dividend.

Summary

Ferroglobe beats Alumina on 9 of the 12 factors compared between the two stocks.

About Alumina

Alumina Limited invests in bauxite mining, alumina refining and selected aluminum smelting operations. The Company’s business undertaking is in the global bauxite, alumina and aluminum industry, which it conducts principally through bauxite mining and alumina refining, with some minor alumina-based chemicals businesses, aluminum smelting and the marketing of those products. The Company conducts these business activities through its joint venture, Alcoa World Alumina & Chemicals (AWAC). AWAC is a producer of alumina and miner of bauxite. AWAC operates mines integrated with alumina refineries in Western Australia and Brazil. Other refineries operate in Spain and Texas in the United States. AWAC’s bauxite deposits are extracted by open cast mining from strata, typically 4 to 6 meters thick under a shallow covering of topsoil and vegetation. The topsoil is removed and stored for later use in restoration of the forest. AWAC supplies bauxite ore to Pinjarra and Kwinana Refineries.

About Ferroglobe

Ferroglobe PLC, formerly VeloNewco Limited, is engaged in silicon and specialty metals industry. The Company produces silicon metal and silicon- and manganese-based alloy, which serves customers in the chemical, aluminum, solar, steel and ductile iron foundry industries. It operates through two segments: Electrometallurgy and Energy. It Electrometallurgy segment includes its coal and quartz mining operations and its silicon metal and ferroalloy production, whereas the Energy segment consists of its hydroelectric power operations. It currently operates approximately 20 production smelting facilities in the field of electrometallurgy: approximately five in Spain, over five in the United States of America, over six in France, over three in South Africa, one in Venezuela, one in Poland, one in Canada, one in Argentina and one in China. It diversifies its production base across approximately five continents, such as Africa, Asia, Europe, North America and South America.

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