Critical Comparison: Ero Copper (NYSE:ERO) & Norsk Hydro ASA (OTCMKTS:NHYDY)

Norsk Hydro ASA (OTCMKTS:NHYDY) and Ero Copper (NYSE:ERO) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Norsk Hydro ASA	4.90%	11.46%	6.05%
Ero Copper	29.79%	30.32%	15.17%

Risk & Volatility

Norsk Hydro ASA has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Ero Copper has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Insider & Institutional Ownership

0.0% of Norsk Hydro ASA shares are owned by institutional investors. Comparatively, 71.3% of Ero Copper shares are owned by institutional investors. 0.0% of Norsk Hydro ASA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Norsk Hydro ASA and Ero Copper, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norsk Hydro ASA	3	6	2	1	2.08
Ero Copper	1	10	5	2	2.44

Ero Copper has a consensus target price of $32.33, suggesting a potential downside of 7.14%. Given Ero Copper’s stronger consensus rating and higher probable upside, analysts clearly believe Ero Copper is more favorable than Norsk Hydro ASA.

Earnings and Valuation

This table compares Norsk Hydro ASA and Ero Copper”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norsk Hydro ASA	$20.05 billion	1.00	$647.52 million	$0.52	19.58
Ero Copper	$785.80 million	4.62	$263.72 million	$2.98	11.68

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

Summary

Ero Copper beats Norsk Hydro ASA on 11 of the 15 factors compared between the two stocks.

About Norsk Hydro ASA

Norsk Hydro ASA engages in the power production, bauxite extraction, alumina refining, aluminium smelting, and recycling activities; and provision of extruded solutions worldwide. It operates through Hydro Bauxite & Alumina, Hydro Aluminium Metal, Hydro Metal Markets, Hydro Extrusions, and Hydro Energy segments. The Hydro Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, primarily the sale of alumina. The Hydro Aluminium Metal segment is involved in the primary aluminum production casting activities. This segment principally offers extrusion ingots, foundry alloys, and sheet and standard ingots. The Metal Markets segment sells products from the company’s primary metal plants; operates recyclers; and trades in physical and financial metals. The Hydro Extrusions segment offers extrusion profiles, building systems, and precision tubing products for construction, automotive and heating, and ventilation and air conditioning sectors, as well as operates recycling facilities. The Hydro Energy segment engages in the trading and wholesale business in Brazil; energy sourcing operations; and operation of power stations in Norway, as well as renewable energy production, such as wind and solar, battery materials, and green hydrogen. Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.

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.