Vale (NYSE:VALE) versus Ero Copper (NYSE:ERO) Financial Comparison

Ero Copper (NYSE:ERO) and Vale (NYSE:VALE) are both materials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

71.3% of Ero Copper shares are owned by institutional investors. Comparatively, 21.9% of Vale shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Ero Copper and Vale, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ero Copper	1	8	5	2	2.50
Vale	2	10	3	0	2.07

Ero Copper presently has a consensus target price of $32.33, suggesting a potential upside of 7.35%. Vale has a consensus target price of $15.71, suggesting a potential upside of 28.92%. Given Vale’s higher possible upside, analysts plainly believe Vale is more favorable than Ero Copper.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ero Copper	$785.80 million	4.00	$263.72 million	$2.98	10.11
Vale	$38.40 billion	1.44	$2.35 billion	$0.49	24.87

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

Volatility & Risk

Ero Copper has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Vale has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ero Copper	29.79%	30.32%	15.17%
Vale	5.11%	19.87%	8.58%

Summary

Ero Copper beats Vale on 10 of the 14 factors compared between the two stocks.

About Ero Copper

Ero Copper Corp. engages in the exploration, development, and production of mining projects in Brazil. The company is involved in the production and sale of copper concentrate from the Caraíba operations located in the Curaçá Valley, northeastern Bahia state, Brazil, as well as gold and silver by-products. It also holds 100% interests in the Tucumã project, a copper development project located within southeastern Pará state; and the Xavantina Operations located in Mato Grosso state. Ero Copper Corp. was incorporated in 2016 and is headquartered in Vancouver, Canada.

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.