Allegheny Technologies (NYSE: ATI) and Freeport-McMoran (NYSE:FCX) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitabiliy.

Dividends

Allegheny Technologies pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Freeport-McMoran does not pay a dividend. Allegheny Technologies pays out -1.6% of its earnings in the form of a dividend.

Volatility and Risk

Allegheny Technologies has a beta of 2.49, suggesting that its stock price is 149% more volatile than the S&P 500. Comparatively, Freeport-McMoran has a beta of 2.55, suggesting that its stock price is 155% more volatile than the S&P 500.

Valuation & Earnings

This table compares Allegheny Technologies and Freeport-McMoran’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Allegheny Technologies $3.24 billion 0.60 $242.50 million ($4.88) -3.65
Freeport-McMoran $14.93 billion 1.27 $4.24 billion $0.15 87.41

Freeport-McMoran has higher revenue and earnings than Allegheny Technologies. Allegheny Technologies is trading at a lower price-to-earnings ratio than Freeport-McMoran, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Allegheny Technologies and Freeport-McMoran’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegheny Technologies -16.10% -1.84% -0.57%
Freeport-McMoran 1.11% 7.97% 1.84%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Allegheny Technologies and Freeport-McMoran, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegheny Technologies 1 3 3 0 2.29
Freeport-McMoran 3 8 2 0 1.92

Allegheny Technologies currently has a consensus target price of $19.74, indicating a potential upside of 10.79%. Freeport-McMoran has a consensus target price of $13.15, indicating a potential upside of 0.33%. Given Allegheny Technologies’ stronger consensus rating and higher probable upside, equities analysts clearly believe Allegheny Technologies is more favorable than Freeport-McMoran.

Insider & Institutional Ownership

96.6% of Allegheny Technologies shares are held by institutional investors. Comparatively, 69.5% of Freeport-McMoran shares are held by institutional investors. 1.1% of Allegheny Technologies shares are held by company insiders. Comparatively, 1.4% of Freeport-McMoran shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Freeport-McMoran beats Allegheny Technologies on 9 of the 15 factors compared between the two stocks.

Allegheny Technologies Company Profile

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.

Freeport-McMoran Company Profile

Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.

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