Lihua International (LIWA) and Arconic (ARNC) Critical Analysis

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Lihua International (OTCMKTS:LIWA) and Arconic (NYSE:ARNC) are both industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Dividends

Arconic pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Lihua International does not pay a dividend. Arconic pays out 19.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

83.5% of Arconic shares are owned by institutional investors. 44.9% of Lihua International shares are owned by company insiders. Comparatively, 0.2% of Arconic shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Lihua International and Arconic’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lihua International N/A N/A N/A N/A N/A
Arconic $12.96 billion 0.70 -$74.00 million $1.22 15.33

Lihua International has higher earnings, but lower revenue than Arconic.

Analyst Ratings

This is a summary of current recommendations for Lihua International and Arconic, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lihua International 0 0 0 0 N/A
Arconic 0 6 5 0 2.45

Arconic has a consensus target price of $24.33, suggesting a potential upside of 30.12%. Given Arconic’s higher probable upside, analysts clearly believe Arconic is more favorable than Lihua International.

Profitability

This table compares Lihua International and Arconic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lihua International N/A N/A N/A
Arconic -2.19% 12.94% 3.63%

Volatility & Risk

Lihua International has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, Arconic has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Summary

Arconic beats Lihua International on 8 of the 11 factors compared between the two stocks.

Lihua International Company Profile

Lihua International, Inc., through its subsidiaries, produces copper replacement in the People's Republic of China. It designs, develops, manufactures, markets, and distributes refined copper products, including copper anode, copper rod, fine and superfine pure copper wire, and copper-clad aluminum (CCA) fine and superfine wires. Its copper rod based wire products comprise cable products used for telephone drop wires and conductors; electric utilities; transmission lines, grid wires, fences, and structured grounds; industrial drop wires, magnet wires, battery cables, and automotive wiring harnesses; and radio frequency shielding, as well as magnet wire products used in electronic motors, transformers, water pumps, automobile meters, energy, industrial, commercial, and residential industries. The company produces and distributes copper and CCA wire products in various forms, including fine wires to smaller wire manufacturers for further processing; magnet wires used for electrical conductivity in a range of motorized appliances; and tin plated wires for the transmission of audio and visual signals. Lihua International, Inc. manufactures and sells copper anode to copper entities, which produce and sell copper cathode to copper products manufacturers. The company sells its products directly to manufacturers or through distributors in the wire and cable industries, as well as through manufacturers in the consumer electronics, audio and visual equipment, white goods, automotive, utility, telecommunications, and specialty cable industries. The company was founded in 1999 and is headquartered in Danyang, the People's Republic of China.

Arconic Company Profile

Arconic Inc. engineers, manufactures, and sells lightweight metals of aluminum, titanium, and nickel worldwide. It operates through three segments: Engineered Products and Solutions, Global Rolled Products, and Transportation and Construction Solutions. The Engineered Products and Solutions produces and sells fastening systems and seamless rolled rings; investment castings, including airfoils and forged jet engine components; and extruded, machined, and formed aircraft parts, as well as various forged, extruded, and machined metal products. This segment serves commercial and defense aerospace, commercial transportation, and power generation end markets. The Global Rolled Products segment produces and sells aluminum sheets and plates; and aseptic foils. This segment serves commercial and defense aerospace, commercial transportation, and power generation end markets. The Transportation and Construction Solutions segment produces and sells integrated aluminum structural systems, architectural extrusions, and forged aluminum commercial vehicle wheels, as well as aluminum products for the industrial products end market. This segment serves nonresidential building and construction, and commercial transportation end markets. The company sells its products directly to customers and through distributors. Arconic Inc. was founded in 2016 and is based in New York, New York.

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