Ferroglobe (GSM) and Alumina (AWCMY) Critical Comparison

Ferroglobe (NASDAQ: GSM) and Alumina (OTCMKTS:AWCMY) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Earnings and Valuation

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This table compares Ferroglobe and Alumina’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ferroglobe $1.74 billion 1.12 $25.17 million $0.13 87.15
Alumina $600,000.00 9,941.09 $339.80 million N/A N/A

Alumina has lower revenue, but higher earnings than Ferroglobe.

Dividends

Alumina pays an annual dividend of $0.73 per share and has a dividend yield of 8.8%. Ferroglobe does not pay a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Ferroglobe and Alumina, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ferroglobe 0 0 5 0 3.00
Alumina 0 0 1 0 3.00

Ferroglobe currently has a consensus price target of $20.50, suggesting a potential upside of 80.94%. Given Ferroglobe’s higher probable upside, equities analysts plainly believe Ferroglobe is more favorable than Alumina.

Volatility & Risk

Ferroglobe has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500. Comparatively, Alumina has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500.

Insider & Institutional Ownership

41.2% of Ferroglobe shares are owned by institutional investors. Comparatively, 0.2% of Alumina shares are owned by institutional investors. 13.1% of Ferroglobe shares are owned by insiders. Comparatively, 1.0% of Alumina shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Ferroglobe and Alumina’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ferroglobe 1.45% 2.32% 1.02%
Alumina N/A N/A N/A

Summary

Ferroglobe beats Alumina on 9 of the 12 factors compared between the two stocks.

About Ferroglobe

Ferroglobe PLC operates in the silicon and specialty metals industry in the United States, Europe, and internationally. The company offers silicon metals that are used in personal care items, construction-related products, health care products, and electronics, as well as used in the manufacture of silicone chemicals; silicomanganese, which is used as deoxidizing agent in the steel manufacturing process; and ferromanganese that is used as a deoxidizing, desulphurizing, and degassing agent in the removal of nitrogen and other harmful elements from steel. It also provides ferrosilicon products that are used to produce stainless steel, carbon steel, and various other steel alloys, as well as to manufacture electrodes and aluminum; silico calcium, which is used in the deoxidation and desulfurization of liquid steel, and production of coatings for cast iron pipes, as well as in the welding process of powder metal; nodularizers and inoculants, which are used in the production of iron; and silica fume, a by-product of the electrometallurgical process of silicon metal and ferrosilicon. In addition, the company operates quartz mines located in Spain, South Africa, the United States, and Canada; and low-ash and metallurgical coal mines in the United States. It serves silicone chemical, aluminum, and steel manufacturers; auto companies and their suppliers; ductile iron foundries; manufacturers of photovoltaic solar cells and computer chips; and concrete producers. The company was formerly known as VeloNewco Limited. Ferroglobe PLC was incorporated in 2015 and is headquartered in London, the United Kingdom. Ferroglobe PLC is a subsidiary of Grupo Villar Mir, S.A.

About Alumina

Alumina Limited invests in bauxite mining, alumina refining and selected aluminum smelting operations. The Company’s business undertaking is in the global bauxite, alumina and aluminum industry, which it conducts principally through bauxite mining and alumina refining, with some minor alumina-based chemicals businesses, aluminum smelting and the marketing of those products. The Company conducts these business activities through its joint venture, Alcoa World Alumina & Chemicals (AWAC). AWAC is a producer of alumina and miner of bauxite. AWAC operates mines integrated with alumina refineries in Western Australia and Brazil. Other refineries operate in Spain and Texas in the United States. AWAC’s bauxite deposits are extracted by open cast mining from strata, typically 4 to 6 meters thick under a shallow covering of topsoil and vegetation. The topsoil is removed and stored for later use in restoration of the forest. AWAC supplies bauxite ore to Pinjarra and Kwinana Refineries.

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