Financial Analysis: Usinas Siderurgicas de Minas Gerais (OTCMKTS:USNZY) vs. Kaiser Aluminum (NASDAQ:KALU)

Usinas Siderurgicas de Minas Gerais (OTCMKTS:USNZY) and Kaiser Aluminum (NASDAQ:KALU) are both materials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares Usinas Siderurgicas de Minas Gerais and Kaiser Aluminum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Usinas Siderurgicas de Minas Gerais	-8.87%	5.49%	3.68%
Kaiser Aluminum	5.49%	24.71%	7.86%

Institutional & Insider Ownership

99.3% of Kaiser Aluminum shares are held by institutional investors. 1.3% of Kaiser Aluminum shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Usinas Siderurgicas de Minas Gerais has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Kaiser Aluminum has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.

Valuation & Earnings

This table compares Usinas Siderurgicas de Minas Gerais and Kaiser Aluminum”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Usinas Siderurgicas de Minas Gerais	$4.70 billion	0.16	-$551.30 million	($0.34)	-4.04
Kaiser Aluminum	$3.37 billion	0.73	$112.50 million	$13.49	11.13

Kaiser Aluminum has lower revenue, but higher earnings than Usinas Siderurgicas de Minas Gerais. Usinas Siderurgicas de Minas Gerais is trading at a lower price-to-earnings ratio than Kaiser Aluminum, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Usinas Siderurgicas de Minas Gerais and Kaiser Aluminum, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Usinas Siderurgicas de Minas Gerais	0	1	0	0	2.00
Kaiser Aluminum	1	2	4	0	2.43

Kaiser Aluminum has a consensus price target of $169.40, suggesting a potential upside of 12.78%. Given Kaiser Aluminum’s stronger consensus rating and higher possible upside, analysts clearly believe Kaiser Aluminum is more favorable than Usinas Siderurgicas de Minas Gerais.

Summary

Kaiser Aluminum beats Usinas Siderurgicas de Minas Gerais on 13 of the 14 factors compared between the two stocks.

About Usinas Siderurgicas de Minas Gerais

Usinas Siderúrgicas de Minas Gerais S.A. manufactures and markets flat steel products in Brazil and internationally. The company operates through three segments: Mining and Logistics, Steel Metallurgy, and Steel Transformation. It extracts and process iron ore, such as pellet and sinter feed and, granulated iron ore; provides storage, handling, and road cargo transportation services; and operates highway and railway cargo terminals. It also manufactures and sells steel products; manufactures and installs equipment for various industries; and transforms cold-rolled coils into hot-dip galvanized coils. In addition, the company provides technology transfer services for steel industry; project management and services for civil construction and capital goods industry; road transportation of flat steel; and texturing and chrome plating of cylinders. It serves automotive, construction, distribution, energy, white line, oil and gas, and machines and equipment markets. Usinas Siderúrgicas de Minas Gerais S.A. was founded in 1956 and is headquartered in Belo Horizonte, Brazil.

About Kaiser Aluminum

Kaiser Aluminum Corporation, together with its subsidiaries, engages in manufacture and sale of semi-fabricated specialty aluminum mill products in the United States and internationally. It offers rolled, extruded, and drawn aluminum products used for aerospace and defense, aluminum beverage and food packaging, automotive and general engineering products. The company's automotive extrusions include extruded aluminum products for structural components, crash management systems, anti-lock braking systems, and drawn tubes for drive shafts, as well as offers fabrication services, including sawing and cutting to length. Its packaging products consist of bare and coated 3000- and 5000-series alloy aluminum coil used for beverage and food packaging industry. In addition, the company's general engineering products comprise alloy plate, sheet, rod, bar, tube, wire, and standard extrusion shapes used in various applications, including the production of military vehicles, ordnances, semiconductor manufacturing cells, electronic devices, after-market motor sport parts, tooling plates, parts for machinery and equipment, bolts, screws, nails, and rivets. Further, its rerolled, extruded, drawn, and cast billet aluminum products used for industrial end uses. The company sells its products directly to customers through sales personnel located in the United States, Canada, Western Europe, and China, as well as through independent sales agents in other regions of Asia, Latin America, and the Middle East. Kaiser Aluminum Corporation was founded in 1946 and is headquartered in Franklin, Tennessee.