Head to Head Survey: Lundin Mining (OTCMKTS:LUNMF) & Kaiser Aluminum (NASDAQ:KALU)

Kaiser Aluminum (NASDAQ:KALU) and Lundin Mining (OTCMKTS:LUNMF) are both materials companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.

Profitability

This table compares Kaiser Aluminum and Lundin Mining’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kaiser Aluminum	4.85%	23.65%	7.66%
Lundin Mining	32.52%	14.25%	10.68%

Insider & Institutional Ownership

99.3% of Kaiser Aluminum shares are owned by institutional investors. Comparatively, 0.1% of Lundin Mining shares are owned by institutional investors. 1.3% of Kaiser Aluminum shares are owned by company insiders. Comparatively, 0.4% of Lundin Mining shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Kaiser Aluminum pays an annual dividend of $3.08 per share and has a dividend yield of 2.7%. Lundin Mining pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Kaiser Aluminum pays out 23.8% of its earnings in the form of a dividend. Lundin Mining pays out 4.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Risk and Volatility

Kaiser Aluminum has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, Lundin Mining has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Kaiser Aluminum and Lundin Mining, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kaiser Aluminum	0	3	4	0	2.57
Lundin Mining	0	7	4	1	2.50

Kaiser Aluminum presently has a consensus price target of $141.00, indicating a potential upside of 25.24%. Given Kaiser Aluminum’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Kaiser Aluminum is more favorable than Lundin Mining.

Valuation and Earnings

This table compares Kaiser Aluminum and Lundin Mining”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kaiser Aluminum	$3.37 billion	0.55	$112.50 million	$12.95	8.69
Lundin Mining	$4.05 billion	4.40	$1.28 billion	$1.81	11.56

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

About Kaiser Aluminum

Kaiser Aluminum is a producer of semi-fabricated aluminum products, including plate, sheet, coil and extrusions. The company focuses on products that require specialized alloys and manufacturing capabilities. Its products serve customers in markets such as aerospace, automotive, packaging, general engineering, building and construction, and consumer goods. Kaiser Aluminum operates manufacturing facilities in North America and serves customers across a range of industries and geographies. The company traces its origins to aluminum operations established by industrialist Henry J. Kaiser during World War II and was founded in 1946.

About Lundin Mining

Lundin Mining is a Canadian mining company headquartered in Vancouver, focused primarily on the exploration, development and production of copper. Its operations in South America include the Candelaria and Caserones mines in Chile and the Chapada mine in Brazil. The company’s principal product is copper, with gold, silver and molybdenum also produced as by-products at some of its operations. Lundin Mining is also involved in developing the Vicuña district, a copper, gold and silver project spanning Argentina and Chile, through a joint venture with BHP.