Head-To-Head Review: Nucor (NYSE:NUE) and Alamos Gold (NYSE:AGI)

Alamos Gold (NYSE:AGI) and Nucor (NYSE:NUE) are both large-cap materials companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Institutional and Insider Ownership

64.3% of Alamos Gold shares are held by institutional investors. Comparatively, 76.5% of Nucor shares are held by institutional investors. 0.5% of Alamos Gold shares are held by company insiders. Comparatively, 0.6% of Nucor shares are held by company 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.

Dividends

Alamos Gold pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Nucor pays an annual dividend of $2.24 per share and has a dividend yield of 0.9%. Alamos Gold pays out 5.8% of its earnings in the form of a dividend. Nucor pays out 17.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Nucor has raised its dividend for 52 consecutive years. Nucor is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Alamos Gold has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, Nucor has a beta of 1.87, suggesting that its stock price is 87% more volatile than the S&P 500.

Profitability

This table compares Alamos Gold and Nucor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alamos Gold	52.64%	19.28%	13.47%
Nucor	7.99%	12.73%	8.03%

Analyst Ratings

This is a summary of recent recommendations and price targets for Alamos Gold and Nucor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alamos Gold	0	2	8	0	2.80
Nucor	0	3	13	0	2.81

Alamos Gold presently has a consensus price target of $47.50, indicating a potential upside of 28.52%. Nucor has a consensus price target of $272.38, indicating a potential upside of 4.37%. Given Alamos Gold’s higher possible upside, equities analysts clearly believe Alamos Gold is more favorable than Nucor.

Earnings & Valuation

This table compares Alamos Gold and Nucor”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alamos Gold	$1.81 billion	8.55	$885.80 million	$2.77	13.34
Nucor	$32.49 billion	1.82	$1.74 billion	$12.54	20.81

Nucor has higher revenue and earnings than Alamos Gold. Alamos Gold is trading at a lower price-to-earnings ratio than Nucor, indicating that it is currently the more affordable of the two stocks.

Summary

Nucor beats Alamos Gold on 11 of the 17 factors compared between the two stocks.

About Alamos Gold

Alamos Gold Inc. engages in the acquisition, exploration, development, and extraction of precious metals in Canada and Mexico. The company primarily explores for gold deposits. It holds 100% interest in the Young-Davidson mine and Island Gold mine located in the Ontario, Canada; Mulatos mine located in the Sonora, Mexico; and Lynn Lake project situated in the Manitoba, Canada. The company also holds interest in the Quartz Mountain project located in the Oregon United states. Alamos Gold Inc. was founded in 2003 and is based in Toronto, Canada.

About Nucor

Nucor Corporation engages in manufacture and sale of steel and steel products. It operates in three segments: steel mills, steel products, and raw materials. The Steel Mills segment produces hot-rolled, cold-rolled, and galvanized sheet steel products; plate steel products; wide-flange beams, beam blanks, and H-piling and sheet piling structural steel products; bar steel products, such as blooms, billets, concrete reinforcing and merchant bars, and engineered special bar quality products; and engages in the steel trading and rebar distribution businesses. This segment sells its products to steel service centers, fabricators, and manufacturers in the United States, Canada, and Mexico. The Steel Products segment offers steel joists and joist girders, steel decks, and galvanized torque tubes for used in solar arrays, hollow structural section steel tubing, electrical conduit, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, steel grating and expanded metal, wire and wire mesh, metal building systems, insulated metal panels, steel racking, overhead doors, and utility towers and structures for communications and energy transmission. This segment is also involved in the piling distribution business. The Raw Materials segment produces direct reduced iron (DRI); brokers ferrous and nonferrous metals, pig iron, hot briquetted iron, and DRI; supplies ferro-alloys; processes ferrous and nonferrous scrap metal; and engages in the natural gas production and industrial gas business. This segment sells its ferrous scrap to electric arc furnace steel mills and foundries for manufacturing process; and nonferrous scrap metal to aluminum can producers, secondary aluminum smelters, steel mills and other processors, and consumers of various nonferrous metals. It markets its products through in-house sales force; and internal distribution and trading companies. Nucor Corporation was founded in 1905 and is headquartered in Charlotte, North Carolina.