Contrasting Aperam (OTCMKTS:APEMY) and Vale (NYSE:VALE)

Vale (NYSE:VALE) and Aperam (OTCMKTS:APEMY) are both materials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Insider & Institutional Ownership

21.9% of Vale shares are held by institutional investors. 0.2% of Aperam shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Vale and Aperam, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vale	1	12	2	1	2.19
Aperam	1	2	3	1	2.57

Vale currently has a consensus target price of $16.04, indicating a potential upside of 13.31%. Given Vale’s higher probable upside, research analysts plainly believe Vale is more favorable than Aperam.

Valuation & Earnings

This table compares Vale and Aperam”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vale	$41.24 billion	1.56	$2.35 billion	$0.49	28.89
Aperam	$6.88 billion	0.51	$10.18 million	$2.02	23.50

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

Profitability

This table compares Vale and Aperam’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vale	5.11%	19.87%	8.58%
Aperam	2.10%	2.34%	1.17%

Risk and Volatility

Vale has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Aperam has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.

Dividends

Vale pays an annual dividend of $0.44 per share and has a dividend yield of 3.1%. Aperam pays an annual dividend of $1.96 per share and has a dividend yield of 4.1%. Vale pays out 89.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Aperam pays out 97.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Vale beats Aperam on 10 of the 16 factors compared between the two stocks.

About Vale

Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments. The Iron Solutions segment produces and extracts iron ore and pellets, manganese, and other ferrous products; and provides related logistic services. The Energy Transition Materials segment produces and extracts nickel used to produce stainless steel, electric vehicles, and metal alloys; and its by-products, such as gold, silver, cobalt, precious metals, platinum, and others, as well as copper used in the construction sector to produce pipes and electrical wires. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.

About Aperam

Aperam S.A., together with its subsidiaries, produces and sells stainless and specialty steel products worldwide. It operates through four segments: Stainless & Electrical Steel; Services & Solutions; Alloys & Specialties; and Recycling & Renewables. The company offers a range of stainless steel products, including grain oriented and non-grain oriented electrical steel products, and specialty alloys. It is also involved in the management of direct sales of stainless steel products from production facilities; distribution of its products; and the provision of transformation services that include value added and customized steel solutions. In addition, the company designs, produces, and transforms various specialty alloys and other specific stainless steels in forms, such as bars, semis, cold-rolled strips, wire and wire rods, and plates in a range on grades. Further, it engages in the trading, processing, and recycling of raw materials, such as superalloys and titanium; provides Recyco, an electric arc furnace recycling facility that retrieves dust and sludge to recycle stainless steel raw materials and reduce waste; and produces wood and charcoal from cultivated eucalyptus forests. The company serves customers in aerospace, automotive, catering, construction, household appliances, electrical engineering, industrial processes, medical, and oil and gas industries. It distributes its products through a network of steel service centers, transformation facilities, and sales offices. The company was incorporated in 2010 and is headquartered in Luxembourg, Luxembourg.