Howmet Aerospace (NYSE:HWM) and Kaiser Aluminum (NASDAQ:KALU) are both construction companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.
Risk and Volatility
Howmet Aerospace has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500. Comparatively, Kaiser Aluminum has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.
Howmet Aerospace pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Kaiser Aluminum pays an annual dividend of $2.68 per share and has a dividend yield of 4.1%. Howmet Aerospace pays out 3.8% of its earnings in the form of a dividend. Kaiser Aluminum pays out 39.1% 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. Kaiser Aluminum has raised its dividend for 8 consecutive years. Kaiser Aluminum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Howmet Aerospace and Kaiser Aluminum’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Howmet Aerospace||$14.19 billion||0.38||$470.00 million||$2.11||5.86|
|Kaiser Aluminum||$1.51 billion||0.69||$62.00 million||$6.85||9.65|
Howmet Aerospace has higher revenue and earnings than Kaiser Aluminum. Howmet Aerospace is trading at a lower price-to-earnings ratio than Kaiser Aluminum, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and recommmendations for Howmet Aerospace and Kaiser Aluminum, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Howmet Aerospace presently has a consensus target price of $14.00, suggesting a potential upside of 13.18%. Kaiser Aluminum has a consensus target price of $94.50, suggesting a potential upside of 42.92%. Given Kaiser Aluminum’s higher possible upside, analysts clearly believe Kaiser Aluminum is more favorable than Howmet Aerospace.
Institutional and Insider Ownership
78.9% of Howmet Aerospace shares are owned by institutional investors. Comparatively, 99.6% of Kaiser Aluminum shares are owned by institutional investors. 0.1% of Howmet Aerospace shares are owned by insiders. Comparatively, 1.7% of Kaiser Aluminum shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Howmet Aerospace and Kaiser Aluminum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Kaiser Aluminum beats Howmet Aerospace on 10 of the 15 factors compared between the two stocks.
Howmet Aerospace Company Profile
Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries. It offers jet engine components, aerospace fastening systems, and titanium structural parts for mission-critical performance and efficiency in aerospace and defense applications, as well as forged wheels for commercial transportation. The company, formerly known as Arconic Inc., is headquartered in Pittsburgh, Pennsylvania.
Kaiser Aluminum Company Profile
Kaiser Aluminum Corporation manufactures and sells semi-fabricated specialty aluminum mill products. The company offers rolled, extruded, and drawn aluminum products used principally for aerospace and defense, automotive, consumer durables, electronics, electrical, and machinery and equipment applications. Its aerospace and high strength products include heat treat plates and sheets, hard alloy extruded shapes, cold finish rods and bars, seamless drawn tubes, and billets for aerospace and defense industries. The company's automotive extrusions include extruded aluminum products for structural components, crash management systems, anti-lock braking systems, and drawn tubes for drive shafts, as well as offers fabrication services, including sawing and cutting to length. Its general engineering products comprise alloy plate, sheet, rod, bar, tube, wire, and standard extrusion shapes used in various applications, including the production of military vehicles, ordnances, semiconductor manufacturing cells, electronic devices, after-market motor sport parts, tooling plates, parts for machinery and equipment, bolts, screws, nails, and rivets. The company also offers extruded, drawn, and cast billet aluminum products for industrial end uses. It sells its products directly to customers through sales personnel located in the United States, Canada, Western Europe, and China, as well as through independent sales agents in other regions of Asia, Latin America, and the Middle East. Kaiser Aluminum Corporation was founded in 1946 and is headquartered in Foothill Ranch, California.
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