Analyzing Ferroglobe PLC (GSM) and U.S. Silica Holdings (SLCA)

Ferroglobe PLC (NASDAQ: GSM) and U.S. Silica Holdings (NYSE:SLCA) are both mid-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitabiliy, analyst recommendations and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ferroglobe PLC and U.S. Silica Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ferroglobe PLC 0 1 5 0 2.83
U.S. Silica Holdings 1 2 17 0 2.80

Ferroglobe PLC presently has a consensus price target of $12.85, indicating a potential upside of 0.78%. U.S. Silica Holdings has a consensus price target of $53.61, indicating a potential upside of 92.62%. Given U.S. Silica Holdings’ higher possible upside, analysts plainly believe U.S. Silica Holdings is more favorable than Ferroglobe PLC.

Institutional and Insider Ownership

39.9% of Ferroglobe PLC shares are held by institutional investors. 13.1% of Ferroglobe PLC shares are held by company insiders. Comparatively, 1.0% of U.S. Silica Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Ferroglobe PLC and U.S. Silica Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ferroglobe PLC $1.53 billion 1.43 $32.76 million ($0.69) -18.48
U.S. Silica Holdings $855.38 million 2.64 $124.18 million $0.13 214.08

U.S. Silica Holdings has higher revenue, but lower earnings than Ferroglobe PLC. Ferroglobe PLC is trading at a lower price-to-earnings ratio than U.S. Silica Holdings, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Ferroglobe PLC has a beta of 1.76, meaning that its stock price is 76% more volatile than the S&P 500. Comparatively, U.S. Silica Holdings has a beta of 2.33, meaning that its stock price is 133% more volatile than the S&P 500.

Dividends

U.S. Silica Holdings pays an annual dividend of $0.25 per share and has a dividend yield of 0.9%. Ferroglobe PLC does not pay a dividend. U.S. Silica Holdings pays out 192.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Ferroglobe PLC and U.S. Silica Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ferroglobe PLC -7.60% -3.96% -1.94%
U.S. Silica Holdings 1.60% 1.92% 1.12%

Summary

U.S. Silica Holdings beats Ferroglobe PLC on 10 of the 15 factors compared between the two stocks.

Ferroglobe PLC Company Profile

Ferroglobe PLC, formerly VeloNewco Limited, is engaged in silicon and specialty metals industry. The Company produces silicon metal and silicon- and manganese-based alloy, which serves customers in the chemical, aluminum, solar, steel and ductile iron foundry industries. It operates through two segments: Electrometallurgy and Energy. It Electrometallurgy segment includes its coal and quartz mining operations and its silicon metal and ferroalloy production, whereas the Energy segment consists of its hydroelectric power operations. It currently operates approximately 20 production smelting facilities in the field of electrometallurgy: approximately five in Spain, over five in the United States of America, over six in France, over three in South Africa, one in Venezuela, one in Poland, one in Canada, one in Argentina and one in China. It diversifies its production base across approximately five continents, such as Africa, Asia, Europe, North America and South America.

U.S. Silica Holdings Company Profile

U.S. Silica Holdings, Inc. is a domestic producer of commercial silica, a specialized mineral that is an input into a range of end markets. The Company operates in two segments: Oil & Gas Proppants, and Industrial & Specialty Products. In the Oil & Gas Proppants segment, it serves the oil and gas recovery market providing fracturing sand, or frac sand, which is pumped down oil and natural gas wells to prop open rock fissures and manage the flow rate of natural gas and oil from the wells. As of December 31, 2016, the Industrial & Specialty Products segment consisted of over 215 products and materials, which are used in a range of industries, including container glass, fiberglass, specialty glass, flat glass, building products, fillers and extenders, foundry products, chemicals, recreation products and filtration products. It produces and sells a range of commercial silica products, including whole grain and ground products, as well as other industrial mineral products.

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