Contrasting Materion (NYSE:MTRN) and Rio Tinto (NYSE:RIO)

Materion (NYSE:MTRN) and Rio Tinto (NYSE:RIO) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Materion and Rio Tinto, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Materion	0	2	1	0	2.33
Rio Tinto	0	6	5	3	2.79

Materion presently has a consensus price target of $161.00, indicating a potential upside of 19.09%. Rio Tinto has a consensus price target of $85.00, indicating a potential downside of 5.94%. Given Materion’s higher possible upside, equities research analysts clearly believe Materion is more favorable than Rio Tinto.

Earnings and Valuation

This table compares Materion and Rio Tinto”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Materion	$1.68 billion	1.66	$5.89 million	$0.95	142.31
Rio Tinto	$53.66 billion	2.11	$11.55 billion	N/A	N/A

Rio Tinto has higher revenue and earnings than Materion.

Profitability

This table compares Materion and Rio Tinto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Materion	1.12%	12.66%	6.53%
Rio Tinto	N/A	N/A	N/A

Insider and Institutional Ownership

93.6% of Materion shares are owned by institutional investors. Comparatively, 19.3% of Rio Tinto shares are owned by institutional investors. 2.6% of Materion shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Materion has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Rio Tinto has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Dividends

Materion pays an annual dividend of $0.56 per share and has a dividend yield of 0.4%. Rio Tinto pays an annual dividend of $2.95 per share and has a dividend yield of 3.3%. Materion pays out 58.9% of its earnings in the form of a dividend. Materion has raised its dividend for 13 consecutive years.

About Materion

Materion Corporation, together with its subsidiaries, produces advanced engineered materials used in semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and telecom and data center in the United States, Asia, Europe, and internationally. The company operates in four segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The company provides advanced engineered solutions comprising beryllium and non-beryllium containing alloy systems and custom engineered parts in strip, bulk, rod, plate, bar, tube, and other customized shapes; engineering and product development services; alloyed metals, beryllium products, and beryllium hydroxide; precision strip, rod, and wire products, as well as engineered strip metal products; and ToughMet alloys and SupremEX aluminum silicon carbide metal matrix composite formulation products. It operates the bertrandite ore mine and refinery located in Utah that provides feedstock hydroxide for its beryllium businesses and external sale. In addition, it produces advanced chemicals, microelectronics packaging, precious metal, non-precious metal, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal pre-forms, high temperature braze materials, and ultra-pure wire. Further, the company designs and produces precision thin film coatings, optical filters, and assemblies. The company sells its products directly from its facilities, as well as through company-owned service centers, outside distributors, agents, direct sales offices, and independent sales representatives. The company was formerly known as Brush Engineered Materials Inc. and changed its name to Materion Corporation in March 2011. Materion Corporation was founded in 1921 and is headquartered in Mayfield Heights, Ohio.

About Rio Tinto

Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company operates through Iron Ore, Aluminium, Copper, and Minerals Segments. The Iron Ore segment engages in the iron ore mining, and salt and gypsum production in Western Australia. The Aluminum segment is involved in bauxite mining; alumina refining; and aluminium smelting. The Copper segment engages in mining and refining of copper, gold, silver, molybdenum, and other by-products and exploration activities. The Minerals segment is involved in mining and processing of borates, titanium dioxide feedstock, and iron concentrate and pellets; diamond mining, sorting, and marketing; and development projects for battery materials, such as lithium. It also owns and operates open pit and underground mines; and refineries, smelters, processing plants and power, and shipping facilities. Rio Tinto Group was founded in 1873 and is headquartered in London, the United Kingdom.