Ternium (TX) & Haynes International (HAYN) Critical Analysis
Ternium (NYSE: TX) and Haynes International (NASDAQ:HAYN) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.
Risk & Volatility
Ternium has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Haynes International has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Ternium and Haynes International, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ternium presently has a consensus price target of $30.13, indicating a potential upside of 1.06%. Haynes International has a consensus price target of $37.33, indicating a potential upside of 24.78%. Given Haynes International’s higher probable upside, analysts plainly believe Haynes International is more favorable than Ternium.
Ternium pays an annual dividend of $1.00 per share and has a dividend yield of 3.4%. Haynes International pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. Ternium pays out 22.9% of its earnings in the form of a dividend. Haynes International pays out -314.3% 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.
This table compares Ternium and Haynes International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
21.7% of Ternium shares are owned by institutional investors. Comparatively, 98.4% of Haynes International shares are owned by institutional investors. 0.0% of Ternium shares are owned by insiders. Comparatively, 4.4% of Haynes International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Ternium and Haynes International’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ternium||$8.01 billion||0.73||$1.78 billion||$4.37||6.82|
|Haynes International||$401.97 million||0.92||$13.03 million||($0.28)||-106.86|
Ternium has higher revenue and earnings than Haynes International. Haynes International is trading at a lower price-to-earnings ratio than Ternium, indicating that it is currently the more affordable of the two stocks.
Ternium beats Haynes International on 9 of the 15 factors compared between the two stocks.
Ternium S.A. is a producer of steel products. The Company produces finished and semi-finished steel products and iron ore, which are sold either directly to steel manufacturers, steel processors or end users. The Company operates through two segments: Steel and Mining. The Steel segment includes the sales of steel products and the Mining segment includes the sales of iron ore products, which are primarily inter-company. The Steel segment comprises three operating segments: Mexico, the Southern Region and Other Markets. In the steel segment, steel products include slabs, billets and round bars (steel in its basic, semi-finished state), hot-rolled coils and sheets, bars and stirrups, wire rods, cold-rolled coils and sheets, tin plate, hot dipped galvanized and electrogalvanized sheets and pre-painted sheets, steel pipes and tubular products, beams, roll-formed products, and other products. In the mining segment, iron ore is sold as concentrates (fines) and pellets.
About Haynes International
Haynes International, Inc. (Haynes) is a producer of nickel- and cobalt-based alloys in flat product forms, such as sheet, coil and plate forms. The Company also produces its products as seamless and welded tubulars, and in slab, bar, billet and wire forms. It focuses on developing, manufacturing, marketing and distributing alloys, which are sold in the aerospace, chemical processing and industrial gas turbine industries. Its products consist of high-temperature resistant alloys (HTA) products and corrosion-resistant alloys (CRA) products. Its HTA products are used in manufacturing components for the hot sections of gas turbine engines. Its CRA products are used in a range of applications, such as chemical processing, power plant emissions control, hazardous waste treatment, sour gas production and pharmaceutical vessels. The Company has a four-high Steckel rolling mill used in hot rolling high-performance alloys. The Company has operations in the United States, Europe and China.
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