Constellium (NYSE:CSTM) and Southern Copper (NYSE:SCCO) Critical Survey

Southern Copper (NYSE:SCCO) and Constellium (NYSE:CSTM) are both materials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Valuation & Earnings

This table compares Southern Copper and Constellium”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Copper	$13.42 billion	10.49	$4.33 billion	$7.64	22.08
Constellium	$8.45 billion	0.35	$273.00 million	$4.10	5.31

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

Volatility and Risk

Southern Copper has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Constellium has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.

Profitability

This table compares Southern Copper and Constellium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern Copper	37.16%	51.61%	27.33%
Constellium	5.73%	49.04%	9.96%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Southern Copper and Constellium, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Copper	7	4	2	0	1.62
Constellium	0	3	5	0	2.62

Southern Copper presently has a consensus target price of $159.26, suggesting a potential downside of 5.57%. Constellium has a consensus target price of $33.29, suggesting a potential upside of 52.85%. Given Constellium’s stronger consensus rating and higher probable upside, analysts plainly believe Constellium is more favorable than Southern Copper.

Insider & Institutional Ownership

7.9% of Southern Copper shares are held by institutional investors. Comparatively, 92.6% of Constellium shares are held by institutional investors. 0.1% of Southern Copper shares are held by insiders. Comparatively, 1.2% of Constellium shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Southern Copper beats Constellium on 8 of the 14 factors compared between the two stocks.

About Southern Copper

Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc, copper, molybdenum, silver, gold, and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant in Mexico. The company also operates Buenavista, an open-pit copper mine, as well as two copper concentrators and two operating SX-EW plants in Mexico. In addition, it operates underground mines that produce zinc, lead, copper, silver, and gold; a coal mine; and a zinc refinery. The company has interests in 156,818 hectares and 502,688 hectares of concessions in Peru and Mexico; and 168,200 hectares and 28,453 hectares of exploration concessions in Argentina and Chile. Southern Copper Corporation was incorporated in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation is a subsidiary of Americas Mining Corporation.

About Constellium

Constellium SE, together with its subsidiaries, engages in the design, manufacture, and sale of rolled and extruded aluminum products for the packaging, aerospace, automotive, defense, and other transportation and industry end-markets. The company operates through three segments: Packaging & Automotive Rolled Products, Aerospace & Transportation, and Automotive Structures & Industry. The Packaging & Automotive Rolled Products segment produces rolled aluminum products, including can stock and closure stock for the beverage and food industry, as well as foil stock for the flexible packaging market. This segment also supplies automotive body sheets and heat exchangers for the automotive market; and specialty reflective sheets. The Aerospace & Transportation segment provides rolled aluminum products, including aerospace plates, sheets, and extrusions; and aerospace wing skins, as well as plates and sheets for use in transportation, industry, and defense applications. The Automotive Structures & Industry segment offers extruded aluminium products and aluminium structural components for the automotive industry, including crash-management systems, body structures, side impact beams, and battery enclosures; and fabricates hard and soft alloy extruded profiles for various industry applications in the automotive, engineering, rail, and other transportation end markets. This segment also provides downstream technology and services, which include pre-machining, surface treatment, research and development, and technical support services. It sells its products directly or through distributors in France, Germany, the Czech Republic, the United Kingdom, Switzerland, and the United States, as well as Shanghai, and Seoul. The company was incorporated in 2010 and is headquartered in Paris, France.