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

Profitability

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This table compares Alumina and Vedanta’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
Vedanta 7.87% 19.51% 7.94%

Dividends

Alumina pays an annual dividend of $0.73 per share and has a dividend yield of 8.8%. Vedanta pays an annual dividend of $7.71 per share and has a dividend yield of 43.2%.

Analyst Recommendations

This is a summary of recent ratings and target prices for Alumina and Vedanta, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alumina 0 0 1 0 3.00
Vedanta 1 0 2 0 2.33

Valuation & Earnings

This table compares Alumina and Vedanta’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alumina $600,000.00 9,965.08 $339.80 million N/A N/A
Vedanta $10.68 billion 1.24 $848.60 million N/A N/A

Vedanta has higher revenue and earnings than Alumina.

Insider and Institutional Ownership

0.2% of Alumina shares are owned by institutional investors. Comparatively, 4.5% of Vedanta shares are owned by institutional investors. 1.0% of Alumina shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Alumina has a beta of 0.23, meaning that its stock price is 77% less volatile than the S&P 500. Comparatively, Vedanta has a beta of 1.89, meaning that its stock price is 89% more volatile than the S&P 500.

Summary

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

Alumina Company Profile

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.

Vedanta Company Profile

Vedanta Limited, a diversified natural resources company, engages in exploring, extracting, and processing minerals, and oil and gas in India. It produces oil and gas, zinc, lead, silver, copper, iron ore, and aluminum. The company also operates 600 megawatts of thermal coal based power facility in the State of Odisha; and 274 megawatts of wind power plants. In addition, it engages in the mechanization of coal handling facilities; and upgradation of general cargo berth for handling coal at the outer harbor of Vishakapatnam Port on the east coast of India. The company was formerly known as Sesa Sterlite Limited and changed its name to Vedanta Limited in March 2015. The company was incorporated in 1965 and is based in Mumbai, India. Vedanta Limited is a subsidiary of Vedanta Resources Plc.

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