BHP Billiton Limited (NYSE: BHP) and Allegheny Technologies (NYSE:ATI) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitabiliy, risk, institutional ownership, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings for BHP Billiton Limited and Allegheny Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BHP Billiton Limited 1 5 9 0 2.53
Allegheny Technologies 1 3 3 0 2.29

BHP Billiton Limited presently has a consensus price target of $35.33, suggesting a potential downside of 5.09%. Allegheny Technologies has a consensus price target of $19.74, suggesting a potential upside of 16.61%. Given Allegheny Technologies’ higher probable upside, analysts plainly believe Allegheny Technologies is more favorable than BHP Billiton Limited.

Dividends

BHP Billiton Limited pays an annual dividend of $1.60 per share and has a dividend yield of 4.3%. Allegheny Technologies pays an annual dividend of $0.08 per share and has a dividend yield of 0.5%. Allegheny Technologies pays out -1.6% of its earnings in the form of a dividend.

Insider and Institutional Ownership

3.0% of BHP Billiton Limited shares are held by institutional investors. Comparatively, 96.6% of Allegheny Technologies shares are held by institutional investors. 0.0% of BHP Billiton Limited shares are held by company insiders. Comparatively, 1.1% of Allegheny Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

BHP Billiton Limited has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Allegheny Technologies has a beta of 2.49, meaning that its stock price is 149% more volatile than the S&P 500.

Profitability

This table compares BHP Billiton Limited and Allegheny Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BHP Billiton Limited N/A N/A N/A
Allegheny Technologies -16.10% -1.84% -0.57%

Earnings & Valuation

This table compares BHP Billiton Limited and Allegheny Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BHP Billiton Limited $34.69 billion 2.86 $15.52 billion N/A N/A
Allegheny Technologies $3.24 billion 0.57 $242.50 million ($4.88) -3.47

BHP Billiton Limited has higher revenue and earnings than Allegheny Technologies.

Summary

BHP Billiton Limited beats Allegheny Technologies on 9 of the 14 factors compared between the two stocks.

About BHP Billiton Limited

BHP Billiton Limited is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. The Company extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. The Company manages product distribution through its global logistics chain, including freight and pipeline transportation. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing.

About Allegheny Technologies

Allegheny Technologies Incorporated is a manufacturer of specialty materials and complex components. The Company operates through two business segments: High Performance Materials & Components (HPMC), and Flat Rolled Products (FRP). The HPMC segment produces, converts and distributes a range of materials, including titanium and titanium-based alloys, nickel- and cobalt-based alloys and superalloys, zirconium and related alloys, including hafnium and niobium, advanced powder alloys and other specialty materials, in long product forms, such as ingot, billet, bar, rod, wire, shapes and rectangles, and seamless tubes, plus precision forgings, castings, components and machined parts. The FRP segment produces, converts and distributes stainless steel, nickel-based alloys, specialty alloys, and titanium and titanium-based alloys, in a range of product forms, including plate, sheet, engineered strip, and Precision Rolled Strip products.

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