Vallourec (OTCMKTS:VLOWY) versus Norsk Hydro ASA (OTCMKTS:NHYDY) Critical Survey

Norsk Hydro ASA (OTCMKTS:NHYDY) and Vallourec (OTCMKTS:VLOWY) are both materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Institutional and Insider Ownership

0.0% of Norsk Hydro ASA shares are held by institutional investors. 0.0% of Norsk Hydro ASA shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Norsk Hydro ASA pays an annual dividend of $0.23 per share and has a dividend yield of 2.8%. Vallourec pays an annual dividend of $0.35 per share and has a dividend yield of 8.5%. Norsk Hydro ASA pays out 44.2% of its earnings in the form of a dividend. Vallourec pays out 106.1% 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 Norsk Hydro ASA and Vallourec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norsk Hydro ASA	4.90%	11.46%	6.05%
Vallourec	9.49%	14.98%	7.50%

Volatility & Risk

Norsk Hydro ASA has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Vallourec has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Norsk Hydro ASA and Vallourec, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norsk Hydro ASA	1	7	2	1	2.27
Vallourec	0	0	1	0	3.00

Valuation & Earnings

This table compares Norsk Hydro ASA and Vallourec”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norsk Hydro ASA	$20.05 billion	0.81	$647.52 million	$0.52	15.75
Vallourec	$4.31 billion	1.27	$401.23 million	$0.33	12.48

Norsk Hydro ASA has higher revenue and earnings than Vallourec. Vallourec is trading at a lower price-to-earnings ratio than Norsk Hydro ASA, indicating that it is currently the more affordable of the two stocks.

Summary

Norsk Hydro ASA beats Vallourec on 10 of the 16 factors compared between the two stocks.

About Norsk Hydro ASA

Norsk Hydro ASA engages in the power production, bauxite extraction, alumina refining, aluminium smelting, and recycling activities; and provision of extruded solutions worldwide. It operates through Hydro Bauxite & Alumina, Hydro Aluminium Metal, Hydro Metal Markets, Hydro Extrusions, and Hydro Energy segments. The Hydro Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, primarily the sale of alumina. The Hydro Aluminium Metal segment is involved in the primary aluminum production casting activities. This segment principally offers extrusion ingots, foundry alloys, and sheet and standard ingots. The Metal Markets segment sells products from the company’s primary metal plants; operates recyclers; and trades in physical and financial metals. The Hydro Extrusions segment offers extrusion profiles, building systems, and precision tubing products for construction, automotive and heating, and ventilation and air conditioning sectors, as well as operates recycling facilities. The Hydro Energy segment engages in the trading and wholesale business in Brazil; energy sourcing operations; and operation of power stations in Norway, as well as renewable energy production, such as wind and solar, battery materials, and green hydrogen. Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.

About Vallourec

Vallourec S.A., through its subsidiaries, provides tubular solutions for the oil and gas, industry, and energy markets in Europe, North America, South America, Asia, the Middle East, and internationally. It operates through Tubes; Mine & Forests; and Holding Companies & Other segments. The company offers seamless tubes for refineries, petrochemical facilities, and floating liquefied natural gas plants, as well as production, storage, and offloading units; VAM connections; rigid subsea line pipes and onshore rigid line pipes; and carbon steel and steel alloy tubes, hollow bars, and connections. It also provides assistance in lowering tubes, inspecting connections, and supervising assembly; thread tubes inventory management; tube inspection, maintenance, and repair services; on-site services; preparation for drilling operations; well coordination and supply services based on the drilling programs; and integrated solutions for the subsea line pipe market comprising welding, coating, insulation, bending, logistics, project management, and service agreements. In addition, the company offers tubular products for geothermal; carbon capture, utilization, and storage; and hydrogen industries. Further, it provides tubes and hollow bars, as well as circular, square, rectangular, and octagonal sections for the manufacture of cranes, construction machinery, agricultural machinery, and hydraulic cylinders; and infrastructure construction, as well as axle tubes and gearbox applications for the automotive industry. Additionally, the company is involved in the iron ore and charcoal production businesses. It serves oil service, engineering, and construction companies; distributors and industrial equipment manufacturers; and energy companies, and carbon capture and storage specialists, as well as geothermal, green hydrogen, and solar developers. Vallourec S.A. was founded in 1895 and is based in Meudon, France.