Financial Analysis: Vale (NYSE:VALE) & Century Aluminum (NASDAQ:CENX)

Century Aluminum (NASDAQ:CENX) and Vale (NYSE:VALE) are both materials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Earnings & Valuation

This table compares Century Aluminum and Vale”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Century Aluminum	$2.53 billion	1.35	$41.80 million	$5.79	5.96
Vale	$38.40 billion	1.50	$2.35 billion	$0.49	25.89

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Century Aluminum and Vale, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Century Aluminum	0	3	4	0	2.57
Vale	2	10	3	0	2.07

Century Aluminum presently has a consensus target price of $64.60, indicating a potential upside of 87.14%. Vale has a consensus target price of $15.71, indicating a potential upside of 23.83%. Given Century Aluminum’s stronger consensus rating and higher possible upside, analysts clearly believe Century Aluminum is more favorable than Vale.

Risk and Volatility

Century Aluminum has a beta of 2.07, indicating that its share price is 107% more volatile than the S&P 500. Comparatively, Vale has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Insider and Institutional Ownership

61.6% of Century Aluminum shares are held by institutional investors. Comparatively, 21.9% of Vale shares are held by institutional investors. 0.8% of Century Aluminum shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Century Aluminum and Vale’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Century Aluminum	22.63%	33.83%	15.14%
Vale	5.11%	19.87%	8.58%

Summary

Century Aluminum beats Vale on 10 of the 14 factors compared between the two stocks.

About Century Aluminum

Century Aluminum Company, together with its subsidiaries, engages in the production of standard-grade and value-added primary aluminum products in the United States and Iceland. It also owns and operates an alumina production facility in Iceland, and a carbon anode production facility in the Netherlands. The company was founded in 1995 and is headquartered in Chicago, Illinois.

About Vale

Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments. The Iron Solutions segment produces and extracts iron ore and pellets, manganese, and other ferrous products; and provides related logistic services. The Energy Transition Materials segment produces and extracts nickel used to produce stainless steel, electric vehicles, and metal alloys; and its by-products, such as gold, silver, cobalt, precious metals, platinum, and others, as well as copper used in the construction sector to produce pipes and electrical wires. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.