Allegheny Technologies (NYSE: ATI) and Materion Corp (NYSE:MTRN) are both large-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Dividends

Materion Corp pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. Allegheny Technologies does not pay a dividend. Materion Corp pays out 30.8% of its earnings in the form of a dividend. Materion Corp has increased its dividend for 4 consecutive years.

Profitability

This table compares Allegheny Technologies and Materion Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegheny Technologies -2.45% 1.09% 0.31%
Materion Corp 3.17% 7.37% 4.77%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Allegheny Technologies and Materion Corp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegheny Technologies 0 5 3 0 2.38
Materion Corp 0 1 0 0 2.00

Allegheny Technologies currently has a consensus target price of $20.57, indicating a potential downside of 20.20%. Materion Corp has a consensus target price of $36.00, indicating a potential downside of 27.93%. Given Allegheny Technologies’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Allegheny Technologies is more favorable than Materion Corp.

Institutional & Insider Ownership

90.8% of Materion Corp shares are owned by institutional investors. 1.1% of Allegheny Technologies shares are owned by insiders. Comparatively, 2.9% of Materion Corp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Allegheny Technologies has a beta of 2.44, meaning that its share price is 144% more volatile than the S&P 500. Comparatively, Materion Corp has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Earnings & Valuation

This table compares Allegheny Technologies and Materion Corp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Allegheny Technologies $3.13 billion 0.90 -$640.90 million ($0.78) -33.05
Materion Corp $969.24 million 1.03 $25.74 million $1.30 38.42

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

Summary

Materion Corp beats Allegheny Technologies on 10 of the 17 factors compared between the two stocks.

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.

About Materion Corp

Materion Corporation, through its subsidiaries, is an integrated producer of engineered materials used in a range of electrical, electronic, thermal, and structural applications. The Company operates in four segments: Performance Alloys and Composites, Advanced Materials, Precision Coatings, and Other. The Performance Alloys and Composites segment consists of businesses, such as Performance Metals and Technical Materials. The Advanced Materials segment produces chemicals, microelectronics packaging, precious metal, non-precious metal and specialty metal products. The Precision Coatings segment includes units, such as Precision Optics and Large Area Coatings. Its products include inorganic chemicals and powders, specialty coatings, specialty engineered beryllium and copper-based alloys, beryllium composites, ceramics and engineered clad, and plated metal systems.

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