Critical Survey: Norsk Hydro (NHYDY) versus Aluminum Co. of China (ACH)

Norsk Hydro (OTCMKTS: NHYDY) and Aluminum Co. of China (NYSE:ACH) are both industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Profitability

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This table compares Norsk Hydro and Aluminum Co. of China’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Norsk Hydro 7.97% 9.39% 5.94%
Aluminum Co. of China N/A N/A N/A

Insider and Institutional Ownership

0.1% of Norsk Hydro shares are held by institutional investors. Comparatively, 0.4% of Aluminum Co. of China shares are held by institutional investors. 0.0% of Norsk Hydro shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Norsk Hydro and Aluminum Co. of China, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Norsk Hydro 0 3 3 0 2.50
Aluminum Co. of China 1 3 1 0 2.00

Earnings and Valuation

This table compares Norsk Hydro and Aluminum Co. of China’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Norsk Hydro $13.93 billion 1.02 $1.06 billion $0.48 14.53
Aluminum Co. of China $26.65 billion 0.35 $204.00 million N/A N/A

Norsk Hydro has higher earnings, but lower revenue than Aluminum Co. of China.

Dividends

Norsk Hydro pays an annual dividend of $0.11 per share and has a dividend yield of 1.6%. Aluminum Co. of China does not pay a dividend. Norsk Hydro pays out 22.9% of its earnings in the form of a dividend.

Risk and Volatility

Norsk Hydro has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Aluminum Co. of China has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500.

Summary

Norsk Hydro beats Aluminum Co. of China on 10 of the 13 factors compared between the two stocks.

About Norsk Hydro

Norsk Hydro ASA operates as an integrated aluminum company worldwide. It operates in six segments: Bauxite & Alumina, Primary Metal, Metal Markets, Rolled Products, Extruded Solutions, and Energy. The Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, as well as the sale of alumina. The Primary Metal segment is involved in the primary aluminum production, remelting, and casting activities. This segment primarily offers extrusion ingots, foundry alloys, sheet ingots, and standard ingots. The Metal Markets segment sells products from the company's primary metal plants; operates remelters; and trades in physical and financial metals. The Rolled Products segment operates rolling mills and a primary metal plant. This segment primarily offers aluminum foils, strips, sheets, and lithographic plates for application in the packaging, automotive, and transport industries, as well as for offset printing plates. The Extruded Solutions segment offers extrusion profiles, building systems, and precision tubing products. The Energy segment owns and operates 26 hydroelectric power plants with an installed capacity of approximately 2,000 MW in Norway. The company also serves the electronics, building and construction, consumer goods, general engineering, printing, HVACR, and solar product industries. Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.

About Aluminum Co. of China

Aluminum Corporation of China Limited, together with its subsidiaries, engages in the manufacture and distribution of alumina, primary aluminum and energy products in the People's Republic of China. It operates through Alumina, Primary Aluminum, Trading, and Energy segments. The Alumina segment is involved in mining and purchasing of bauxite and other raw materials; and production and sale of alumina, as well as alumina-related products, such as alumina hydrate, alumina-based chemical products, and gallium. The Primary Aluminum segment procures alumina and other raw materials, supplemental materials, and electricity power; and produces and sells aluminum and aluminum-related products, such as carbon products, aluminum alloy products, and other electrolytic aluminum products. The Trading segment trades in alumina, primary aluminum, aluminum fabrication products, other non-ferrous metal products, coal products, raw and ancillary materials, and supplemental materials; and provides logistics and transport services to external customers. The Energy segment engages in the research and development, production, and operation of energy products, including coal mining; generates and sells electricity to regional power grid corporations using thermal power, wind power, and solar power sources; and manufacture of energy related equipment. The company also manufactures, acquires, and distributes bauxite mines, limestone ore, aluminum magnesium ore, and related nonferrous metal products; and provides research and development services. The company was founded in 2001 and is based in Beijing, the People's Republic of China.

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