Salzgitter (OTCMKTS:SZGPY – Get Free Report) and HudBay Minerals (NYSE:HBM – Get Free Report) are both materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.
Analyst Recommendations
This is a summary of current ratings for Salzgitter and HudBay Minerals, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Salzgitter | 0 | 3 | 5 | 0 | 2.62 |
| HudBay Minerals | 0 | 2 | 10 | 0 | 2.83 |
HudBay Minerals has a consensus target price of $31.33, suggesting a potential upside of 18.32%. Given HudBay Minerals’ stronger consensus rating and higher possible upside, analysts plainly believe HudBay Minerals is more favorable than Salzgitter.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Salzgitter | $10.16 billion | 0.32 | -$83.95 million | $0.12 | 50.08 |
| HudBay Minerals | $2.21 billion | 5.32 | $568.50 million | $1.70 | 15.58 |
HudBay Minerals has lower revenue, but higher earnings than Salzgitter. HudBay Minerals is trading at a lower price-to-earnings ratio than Salzgitter, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Salzgitter and HudBay Minerals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Salzgitter | 0.65% | 1.29% | 0.54% |
| HudBay Minerals | 27.48% | 9.47% | 5.44% |
Insider & Institutional Ownership
57.8% of HudBay Minerals shares are held by institutional investors. 0.3% of HudBay Minerals shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Dividends
Salzgitter pays an annual dividend of $0.01 per share and has a dividend yield of 0.2%. HudBay Minerals pays an annual dividend of $0.03 per share and has a dividend yield of 0.1%. Salzgitter pays out 8.3% of its earnings in the form of a dividend. HudBay Minerals pays out 1.8% 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.
Risk & Volatility
Salzgitter has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500. Comparatively, HudBay Minerals has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.
Summary
HudBay Minerals beats Salzgitter on 12 of the 16 factors compared between the two stocks.
About Salzgitter
Salzgitter AG, together with its subsidiaries, engages in steel and technology businesses worldwide. It operates through four segments: Steel Production, Steel Processing, Trading, and Technology. The Steel Production segment manufactures steel and special steels, such as hot-rolled wide strip, steel sheet, sections, tailored blanks, as well as scrap trading. The Steel Processing segment produces various high-grade heavy plates; and manufactures line pipes, HFI-welded tubes, and precision and stainless-steel tubes. The Trading segment operates a European sales network, as well as trading companies and agencies worldwide. The Technology segment engages in the provision of machinery and plants for the filling and packaging of beverages, as well as special machinery engineering for shoe manufacturing and elastomer production. The company also provides IT, facility management, logistics, automotive engineering, and research and development services, as well as supplies raw materials. The company was founded in 1858 and is headquartered in Salzgitter, Germany.
About HudBay Minerals
Hudbay Minerals Inc., a diversified mining company, focuses on the exploration, development, operation, and optimization of properties in North and South America. It produces copper concentrates containing gold, silver, and molybdenum; gold concentrates containing zinc; zinc concentrates; molybdenum concentrates; and silver/gold doré. The company's flagship project is the 100% owned Constancia mine located in the Province of Chumbivilcas in southern Peru. Hudbay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.
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