Head-To-Head Analysis: Teck Resources (NYSE:TECK) versus Ternium (NYSE:TX)

Teck Resources (NYSE:TECK) and Ternium (NYSE:TX) are both materials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Valuation & Earnings

This table compares Teck Resources and Ternium”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Teck Resources	$7.70 billion	3.80	$1.00 billion	$5.59	10.82
Ternium	$15.61 billion	0.63	$425.23 million	$4.88	10.08

Teck Resources has higher earnings, but lower revenue than Ternium. Ternium is trading at a lower price-to-earnings ratio than Teck Resources, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Teck Resources and Ternium, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Teck Resources	0	10	6	0	2.38
Ternium	0	5	6	0	2.55

Teck Resources currently has a consensus price target of $75.25, suggesting a potential upside of 24.45%. Ternium has a consensus price target of $57.17, suggesting a potential upside of 16.21%. Given Teck Resources’ higher possible upside, equities analysts clearly believe Teck Resources is more favorable than Ternium.

Institutional and Insider Ownership

78.1% of Teck Resources shares are held by institutional investors. Comparatively, 12.0% of Ternium shares are held by institutional investors. 0.1% of Teck Resources shares are held by company insiders. Comparatively, 0.0% of Ternium shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Teck Resources and Ternium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Teck Resources	25.15%	11.93%	7.01%
Ternium	5.74%	5.77%	3.92%

Dividends

Teck Resources pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. Ternium pays an annual dividend of $2.60 per share and has a dividend yield of 5.3%. Teck Resources pays out 6.4% of its earnings in the form of a dividend. Ternium pays out 53.3% 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.

Volatility and Risk

Teck Resources has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Ternium has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Summary

Teck Resources beats Ternium on 11 of the 15 factors compared between the two stocks.

About Teck Resources

Teck Resources Limited engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. The company operates through Steelmaking Coal, Copper, Zinc, and Energy segments. Its principal products include copper, zinc, steelmaking coal, and blended bitumen. The company also produces lead, silver, and molybdenum; and various specialty and other metals, chemicals, and fertilizers. In addition, it explores for gold. The company was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in April 2009. The company was founded in 1913 and is headquartered in Vancouver, Canada.

About Ternium

Ternium S.A., together with its subsidiaries, manufactures and distributes steel products in Mexico, Southern Region, Brazil, and internationally. It operates through three segments: Steel, Mining, and Usiminas. The Steel segment offers slabs, hot and cold rolled products, coated products, roll formed and tubular products, bars, billets, and other products. Its Mining segment sells iron ore and pellets. The Usiminas segment offers iron ore extraction, steel transformation, and production of capital goods and logistics; and manufactures and sells various products and raw materials, such as flat steel, iron ore, and stamped steel parts for the automotive industry and products for the civil construction and capital goods industry. It also provides medical and social; scrap; renewable energy; and engineering and other services, as well as operates as a distribution company. In addition, the company engages in the exploration, exploitation, and pelletizing of iron ore. Ternium S.A. was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.