SOUTH32 Ltd/S (OTCMKTS: SOUHY) and Vale (NYSE:VALE) are both large-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.
Institutional & Insider Ownership
0.3% of SOUTH32 Ltd/S shares are held by institutional investors. Comparatively, 19.8% of Vale shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares SOUTH32 Ltd/S and Vale’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SOUTH32 Ltd/S||$6.95 billion||1.93||$1.23 billion||$1.08||12.15|
|Vale||$33.97 billion||2.06||$5.51 billion||$1.35||9.92|
Vale has higher revenue and earnings than SOUTH32 Ltd/S. Vale is trading at a lower price-to-earnings ratio than SOUTH32 Ltd/S, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for SOUTH32 Ltd/S and Vale, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Vale has a consensus target price of $14.56, indicating a potential upside of 8.70%. Given Vale’s stronger consensus rating and higher probable upside, analysts clearly believe Vale is more favorable than SOUTH32 Ltd/S.
This table compares SOUTH32 Ltd/S and Vale’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
SOUTH32 Ltd/S pays an annual dividend of $0.63 per share and has a dividend yield of 4.8%. Vale pays an annual dividend of $0.09 per share and has a dividend yield of 0.7%. SOUTH32 Ltd/S pays out 58.3% of its earnings in the form of a dividend. Vale pays out 6.7% 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
SOUTH32 Ltd/S has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500. Comparatively, Vale has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500.
Vale beats SOUTH32 Ltd/S on 13 of the 14 factors compared between the two stocks.
SOUTH32 Ltd/S Company Profile
South32 Limited operates as a diversified metals and mining company primarily in Australia, Southern Africa, and South America. The company has a portfolio of assets producing alumina, aluminum, bauxite, energy and metallurgical coal, manganese ore and alloy, ferronickel, silver, lead, and zinc. It also exports its products. The company was formerly known as BHP Coal Holdings Pty Limited and changed its name to South32 Limited in March 2015. South32 Limited was incorporated in 2000 and is headquartered in Perth, Australia.
Vale Company Profile
Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pallets for use as raw materials in steelmaking in Brazil and internationally. It operates through Ferrous Minerals, Coal, and Base Metals segments. The Ferrous Minerals segment produces and extracts iron ore and pellets, manganese, ferroalloys, and others ferrous products and services, as well as engages in the provision of related railroad, port, and terminal logistics services. The Coal segment is involved in the extraction of metallurgical and thermal coal; and provision of related logistic services. The Base Metals segment produces and extracts non-ferrous minerals, including nickel, as well as its by-products, such as ferro-nickel, cobalt, gold, silver, copper, precious metals, and others. 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.
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