Critical Survey: Constellium (NYSE:CSTM) versus SSAB (OTCMKTS:SSAAY)

Constellium (NYSE:CSTM) and SSAB (OTCMKTS:SSAAY) are both materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Risk & Volatility

Constellium has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500. Comparatively, SSAB has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Profitability

This table compares Constellium and SSAB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Constellium	5.69%	51.66%	9.63%
SSAB	5.73%	8.18%	5.26%

Earnings & Valuation

This table compares Constellium and SSAB”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Constellium	$8.45 billion	0.41	$273.00 million	$3.88	6.60
SSAB	$9.84 billion	1.08	$500.98 million	$0.30	17.70

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

Analyst Recommendations

This is a summary of current ratings for Constellium and SSAB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Constellium	0	4	4	0	2.50
SSAB	0	2	3	0	2.60

Constellium currently has a consensus target price of $33.33, suggesting a potential upside of 30.21%. Given Constellium’s higher possible upside, equities research analysts clearly believe Constellium is more favorable than SSAB.

Institutional and Insider Ownership

92.6% of Constellium shares are held by institutional investors. 1.2% of Constellium shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Constellium beats SSAB on 8 of the 14 factors compared between the two stocks.

About Constellium

Constellium SE, together with its subsidiaries, engages in the design, manufacture, and sale of rolled and extruded aluminum products for the packaging, aerospace, automotive, defense, and other transportation and industry end-markets. The company operates through three segments: Packaging & Automotive Rolled Products, Aerospace & Transportation, and Automotive Structures & Industry. The Packaging & Automotive Rolled Products segment produces rolled aluminum products, including can stock and closure stock for the beverage and food industry, as well as foil stock for the flexible packaging market. This segment also supplies automotive body sheets and heat exchangers for the automotive market; and specialty reflective sheets. The Aerospace & Transportation segment provides rolled aluminum products, including aerospace plates, sheets, and extrusions; and aerospace wing skins, as well as plates and sheets for use in transportation, industry, and defense applications. The Automotive Structures & Industry segment offers extruded aluminium products and aluminium structural components for the automotive industry, including crash-management systems, body structures, side impact beams, and battery enclosures; and fabricates hard and soft alloy extruded profiles for various industry applications in the automotive, engineering, rail, and other transportation end markets. This segment also provides downstream technology and services, which include pre-machining, surface treatment, research and development, and technical support services. It sells its products directly or through distributors in France, Germany, the Czech Republic, the United Kingdom, Switzerland, and the United States, as well as Shanghai, and Seoul. The company was incorporated in 2010 and is headquartered in Paris, France.

About SSAB

SSAB AB (publ) produces and sells steel products in Sweden, Finland, Rest of Europe, the United States, and internationally. It operates through five segments: SSAB Special Steels, SSAB Europe, SSAB Americas, Tibnor, and Ruukki Construction. The SSAB Special Steels segment offers quenched and tempered steels, and advanced high-strength steel products for steel and plate production. The SSAB Europe segment provides strip, heavy plate, and tubular products. The SSAB Americas segment sells heavy plates for steel and plate production. The Tibnor segment distributes a range of steel and non-ferrous metals in the Nordics and Baltics. The Ruukki Construction segment produces and sells energy-efficient building and construction solutions. It markets its steel products under the Strenx, Hardox, Docol, GreenCoat, Toolox, Armox, Duroxite, SSAB AM, SSAB Boron, SSAB Domex, SSAB Form, SSAB Laser, SSAB Weathering, Cor-Ten, and SSAB Multisteel brands. The company's products are used by customers in the heavy transport, construction and infrastructure, industrial applications, construction machinery, energy, and material handling markets. SSAB AB (publ) was founded in 1878 and is headquartered in Stockholm, Sweden.