Vale (NYSE:VALE) vs. Outokumpu (OTCMKTS:OUTKY) Financial Contrast

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

Analyst Ratings

This is a breakdown of current recommendations for Outokumpu and Vale, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Outokumpu	0	4	2	0	2.33
Vale	1	12	2	1	2.19

Vale has a consensus target price of $16.08, indicating a potential upside of 18.52%. Given Vale’s higher probable upside, analysts clearly believe Vale is more favorable than Outokumpu.

Insider & Institutional Ownership

21.9% of Vale shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Outokumpu	-1.48%	-2.38%	-1.41%
Vale	5.11%	19.87%	8.58%

Valuation & Earnings

This table compares Outokumpu and Vale”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outokumpu	$6.19 billion	0.46	-$155.00 million	($0.10)	-29.90
Vale	$38.40 billion	1.60	$2.35 billion	$0.49	27.68

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

Dividends

Outokumpu pays an annual dividend of $0.02 per share and has a dividend yield of 0.7%. Vale pays an annual dividend of $0.44 per share and has a dividend yield of 3.2%. Outokumpu pays out -20.0% of its earnings in the form of a dividend. 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.

Risk & Volatility

Outokumpu has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Vale has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Summary

Vale beats Outokumpu on 12 of the 15 factors compared between the two stocks.

About Outokumpu

Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally. The company operates through three segments: Europe, Americas, and Ferrochrome. It offers cold rolled coils, strips, and sheets; hot rolled coils, strips, and plates; quarto plates; precision strips; and specialized components, such as welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, hardened and customized press plates, suction roll shells, and blancs and disks. The company also provides stainless steel powder which includes Supra 316L, Dura 17-4PH, Ultra 904L, Therma 253MA, Dura 4116, and Ni-free austenitic stainless steel powder; and nickel-based alloys. Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy; marine; and heavy industries. The company was founded in 1910 and is headquartered in Helsinki, Finland.

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.