Vale (NYSE:VALE – Get Free Report) and Century Aluminum (NASDAQ:CENX – Get Free Report) are both materials companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.
Insider and Institutional Ownership
21.9% of Vale shares are held by institutional investors. Comparatively, 61.6% of Century Aluminum shares are held by institutional investors. 0.8% of Century Aluminum shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Vale has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, Century Aluminum has a beta of 2.07, suggesting that its share price is 107% more volatile than the S&P 500.
Earnings and Valuation
This table compares Vale and Century Aluminum”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Vale | $38.40 billion | 1.35 | $2.35 billion | $0.49 | 23.34 |
| Century Aluminum | $2.53 billion | 1.37 | $41.80 million | $5.79 | 6.06 |
Vale has higher revenue and earnings than Century Aluminum. Century Aluminum is trading at a lower price-to-earnings ratio than Vale, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for Vale and Century Aluminum, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vale | 2 | 10 | 3 | 0 | 2.07 |
| Century Aluminum | 0 | 3 | 4 | 0 | 2.57 |
Vale currently has a consensus target price of $15.71, suggesting a potential upside of 37.37%. Century Aluminum has a consensus target price of $64.60, suggesting a potential upside of 84.05%. Given Century Aluminum’s stronger consensus rating and higher possible upside, analysts plainly believe Century Aluminum is more favorable than Vale.
Profitability
This table compares Vale and Century Aluminum’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Vale | 5.11% | 19.87% | 8.58% |
| Century Aluminum | 22.63% | 33.83% | 15.14% |
Summary
Century Aluminum beats Vale on 11 of the 14 factors compared between the two stocks.
About Vale
Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments. The Iron Solutions segment produces and extracts iron ore and pellets, manganese, and other ferrous products; and provides related logistic services. The Energy Transition Materials segment produces and extracts nickel used to produce stainless steel, electric vehicles, and metal alloys; and its by-products, such as gold, silver, cobalt, precious metals, platinum, and others, as well as copper used in the construction sector to produce pipes and electrical wires. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.
About Century Aluminum
Century Aluminum Company, together with its subsidiaries, engages in the production of standard-grade and value-added primary aluminum products in the United States and Iceland. It also owns and operates an alumina production facility in Iceland, and a carbon anode production facility in the Netherlands. The company was founded in 1995 and is headquartered in Chicago, Illinois.
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