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

Institutional and Insider Ownership

88.9% of Materion Corporation shares are held by institutional investors. 2.9% of Materion Corporation 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 large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Materion Corporation has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, Allegheny Technologies has a beta of 2.44, meaning that its share price is 144% more volatile than the S&P 500.

Dividends

Materion Corporation 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 Corporation pays out 30.8% of its earnings in the form of a dividend. Materion Corporation has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a summary of current ratings and price targets for Materion Corporation and Allegheny Technologies, as provided by MarketBeat.

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

Materion Corporation currently has a consensus price target of $36.00, indicating a potential downside of 28.71%. Allegheny Technologies has a consensus price target of $20.57, indicating a potential downside of 8.33%. Given Allegheny Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Allegheny Technologies is more favorable than Materion Corporation.

Valuation & Earnings

This table compares Materion Corporation and Allegheny Technologies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Materion Corporation $969.24 million 1.04 $25.74 million $1.30 38.85
Allegheny Technologies $3.13 billion 0.78 -$640.90 million ($0.78) -28.77

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

Profitability

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

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

Summary

Materion Corporation beats Allegheny Technologies on 10 of the 17 factors compared between the two stocks.

Materion Corporation Company Profile

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.

Allegheny Technologies Company Profile

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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