Critical Contrast: Kinross Gold (NYSE:KGC) versus Acerinox (OTCMKTS:ANIOY)

Kinross Gold (NYSE:KGC) and Acerinox (OTCMKTS:ANIOY) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Kinross Gold and Acerinox, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kinross Gold	0	3	13	1	2.88
Acerinox	1	1	3	1	2.67

Kinross Gold currently has a consensus price target of $37.70, suggesting a potential upside of 62.75%. Given Kinross Gold’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Kinross Gold is more favorable than Acerinox.

Volatility and Risk

Kinross Gold has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Acerinox has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Earnings and Valuation

This table compares Kinross Gold and Acerinox”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kinross Gold	$7.05 billion	3.89	$2.39 billion	$2.64	8.77
Acerinox	$6.54 billion	0.73	-$45.34 million	$0.13	73.54

Kinross Gold has higher revenue and earnings than Acerinox. Kinross Gold is trading at a lower price-to-earnings ratio than Acerinox, indicating that it is currently the more affordable of the two stocks.

Dividends

Kinross Gold pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. Acerinox pays an annual dividend of $0.22 per share and has a dividend yield of 2.3%. Kinross Gold pays out 6.1% of its earnings in the form of a dividend. Acerinox pays out 169.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Kinross Gold and Acerinox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kinross Gold	37.52%	34.00%	23.84%
Acerinox	0.95%	2.59%	0.93%

Insider & Institutional Ownership

63.7% of Kinross Gold shares are held by institutional investors. 1.0% of Kinross Gold shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Kinross Gold beats Acerinox on 13 of the 16 factors compared between the two stocks.

About Kinross Gold

Kinross Gold Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of gold properties principally in the United States, Brazil, Chile, Canada, and Mauritania. The company operates the Fort Knox mine and the Manh Choh project in Alaska, as well as the Round Mountain and the Bald Mountain mines in Nevada, the United States; the Paracatu mine in Brazil; the La Coipa and the Lobo-Marte project in Chile; the Tasiast mine in Mauritania; and the Great Bear project in Canada. It is also involved in the extraction and processing of gold-containing ores; reclamation of gold mining properties; and production and sale of silver. Kinross Gold Corporation was founded in 1993 and is headquartered in Toronto, Canada.

About Acerinox

Acerinox, S.A., together with its subsidiaries, manufactures, process, and markets stainless steel products in Spain, the United States, Africa, Asia, Rest of Europe, and internationally. It operates through Stainless steel, and High-performance Alloys segments. The company offers flat products, including hot and cold rolled coils and sheets, strips, flat bars, and discs, as well as engraved coil and sheet, black coil, slabs, circles, billets, and plates. It provides long products, which include wire and hexagonal wire rods, peeled bars, hot and cold reinforcement bars, black bars, profiles, angles, and steel profiles, as well as stainless steel, color coated, and reinforcement wires. In additions, it offers stainless steel products, such as austenitic, ferritic, duplex, and martensitic. Acerinox, S.A. was incorporated in 1970 and is headquartered in Madrid, Spain.