DPM Metals (OTCMKTS:DPMLF) versus Vallourec (OTCMKTS:VLOWY) Critical Analysis

Vallourec (OTCMKTS:VLOWY) and DPM Metals (OTCMKTS:DPMLF) are both mid-cap materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and target prices for Vallourec and DPM Metals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vallourec	0	0	1	0	3.00
DPM Metals	0	2	3	0	2.60

Profitability

This table compares Vallourec and DPM Metals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vallourec	9.49%	14.98%	7.50%
DPM Metals	50.26%	25.66%	21.67%

Volatility & Risk

Vallourec has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, DPM Metals has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Earnings & Valuation

This table compares Vallourec and DPM Metals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vallourec	$4.31 billion	1.27	$401.23 million	$0.33	12.50
DPM Metals	$950.48 million	9.46	$369.23 million	$3.04	13.49

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

Dividends

Vallourec pays an annual dividend of $0.35 per share and has a dividend yield of 8.5%. DPM Metals pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Vallourec pays out 106.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DPM Metals pays out 5.3% of its earnings in the form of a dividend.

Summary

DPM Metals beats Vallourec on 9 of the 13 factors compared between the two stocks.

About Vallourec

Vallourec S.A., through its subsidiaries, provides tubular solutions for the oil and gas, industry, and energy markets in Europe, North America, South America, Asia, the Middle East, and internationally. It operates through Tubes; Mine & Forests; and Holding Companies & Other segments. The company offers seamless tubes for refineries, petrochemical facilities, and floating liquefied natural gas plants, as well as production, storage, and offloading units; VAM connections; rigid subsea line pipes and onshore rigid line pipes; and carbon steel and steel alloy tubes, hollow bars, and connections. It also provides assistance in lowering tubes, inspecting connections, and supervising assembly; thread tubes inventory management; tube inspection, maintenance, and repair services; on-site services; preparation for drilling operations; well coordination and supply services based on the drilling programs; and integrated solutions for the subsea line pipe market comprising welding, coating, insulation, bending, logistics, project management, and service agreements. In addition, the company offers tubular products for geothermal; carbon capture, utilization, and storage; and hydrogen industries. Further, it provides tubes and hollow bars, as well as circular, square, rectangular, and octagonal sections for the manufacture of cranes, construction machinery, agricultural machinery, and hydraulic cylinders; and infrastructure construction, as well as axle tubes and gearbox applications for the automotive industry. Additionally, the company is involved in the iron ore and charcoal production businesses. It serves oil service, engineering, and construction companies; distributors and industrial equipment manufacturers; and energy companies, and carbon capture and storage specialists, as well as geothermal, green hydrogen, and solar developers. Vallourec S.A. was founded in 1895 and is based in Meudon, France.

About DPM Metals

Dundee Precious Metals Inc., a gold mining company, engages in the acquisition, exploration, development, mining, and processing of precious metals. The company primarily explores for gold, copper, and silver deposits. It holds a portfolio of projects located in Bulgaria, Namibia, Serbia, and Ecuador. The company is based in Toronto, Canada.