Alcoa (AA) vs Ternium S.A. (TX)

Alcoa and Ternium S.A. are both in the Basic Materials sector (Aluminum and Steel). Alcoa and Ternium S.A. are of similar size ($11.2B and $10.7B). Alcoa trades at the lower P/E: 8.5× against 16.0×. Alcoa grew revenue faster over the last twelve months: 6.46% against −1.43%. Alcoa has the higher net margin (9.39% vs 4.37%) and the lower return on invested capital (3.72% vs 4.39%). Both pay a dividend; Ternium S.A. yields more (3.85% vs 0.96%). Across the 22 metrics below, Alcoa leads on 11 and Ternium S.A. on 11.

Valuation

Metric AA TX
P/E 8.48 16.04
P/S 0.80 0.70
P/B 1.49 0.67
Price to free cash flow 30.24 n/m
EV/EBITDA 9.15 5.80
EV/Sales 0.87 0.72
Earnings yield 11.79% 6.23%
Free cash flow yield 3.31% (4.19%)

Profitability

Metric AA TX
Gross margin 18.79% 17.75%
Operating margin 3.61% 7.45%
Net margin 9.39% 4.37%
Free cash flow margin 2.66% (2.94%)
Return on equity 18.77% 4.20%
Return on assets 8.02% 2.89%
Return on invested capital 3.72% 4.39%

Growth

Metric AA TX
Revenue growth (TTM) 6.46% (1.43%)
EPS growth (last fiscal year) 1,600.00% 903.70%
Revenue growth, 5-year CAGR 6.68% 12.31%
Net income growth, 5-year CAGR 0.00% (11.39%)

Health

Metric AA TX
Debt to equity 0.30 0.18
Current ratio 1.54 2.58
Net debt to EBITDA 0.90 (0.41)

Dividend

Metric AA TX
Dividend yield 0.96% 3.85%
Payout ratio 0.08 0.62

Size

Metric AA TX
Market cap 10.67b 11.17b

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