Financial Analysis: Nexa Resources (NYSE:NEXA) & Materion (NYSE:MTRN)

Materion (NYSE:MTRN) and Nexa Resources (NYSE:NEXA) are both materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Insider & Institutional Ownership

93.6% of Materion shares are owned by institutional investors. 2.8% of Materion shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Materion has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Nexa Resources has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Profitability

This table compares Materion and Nexa Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Materion	4.29%	13.38%	6.98%
Nexa Resources	8.02%	20.25%	5.28%

Analyst Recommendations

This is a summary of current ratings for Materion and Nexa Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Materion	0	1	3	1	3.00
Nexa Resources	1	6	0	0	1.86

Materion currently has a consensus target price of $310.00, indicating a potential upside of 29.02%. Nexa Resources has a consensus target price of $14.60, indicating a potential upside of 16.84%. Given Materion’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Materion is more favorable than Nexa Resources.

Earnings & Valuation

This table compares Materion and Nexa Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Materion	$1.79 billion	2.80	$74.82 million	$4.29	56.01
Nexa Resources	$3.00 billion	0.55	$132.63 million	$2.09	5.98

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

Summary

Materion beats Nexa Resources on 11 of the 15 factors compared between the two stocks.

About Materion

Materion Corporation, together with its subsidiaries, produces advanced engineered materials used in semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and telecom and data center in the United States, Asia, Europe, and internationally. The company operates in four segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The company provides advanced engineered solutions comprising beryllium and non-beryllium containing alloy systems and custom engineered parts in strip, bulk, rod, plate, bar, tube, and other customized shapes; engineering and product development services; alloyed metals, beryllium products, and beryllium hydroxide; precision strip, rod, and wire products, as well as engineered strip metal products; and ToughMet alloys and SupremEX aluminum silicon carbide metal matrix composite formulation products. It operates the bertrandite ore mine and refinery located in Utah that provides feedstock hydroxide for its beryllium businesses and external sale. In addition, it produces advanced chemicals, microelectronics packaging, precious metal, non-precious metal, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal pre-forms, high temperature braze materials, and ultra-pure wire. Further, the company designs and produces precision thin film coatings, optical filters, and assemblies. The company sells its products directly from its facilities, as well as through company-owned service centers, outside distributors, agents, direct sales offices, and independent sales representatives. The company was formerly known as Brush Engineered Materials Inc. and changed its name to Materion Corporation in March 2011. Materion Corporation was founded in 1921 and is headquartered in Mayfield Heights, Ohio.

About Nexa Resources

Nexa Resources S.A., together with its subsidiaries, engages in the zinc mining and smelting business worldwide. The company operates in two segments, Mining and Smelting. It produces zinc, zamac, zinc oxide, and zincal, as well as by-products, such as copper, lead, silver, gold, copper sulfate, sulfuric acid, copper cementum, silver concentrate, slag aggregates, and cadmium/sponge deposits. The company owns and operates six polymetallic mines, including three located in the Central Andes of Peru; two located in the State of Minas Gerais in Brazil; and one located in the State of Mato Grosso in Brazil. It also owns and operates three zinc smelters comprising one located in Cajamarquilla in Peru; and two located in the State of Minas Gerais in Brazil, which recovers and produces metallic zinc, zinc oxide, and by-products, such as sulfuric acid. The company also exports its products. Its products are used in civil construction, transportation, energy, agriculture, health, and consumer goods industries. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is based in Luxembourg, Luxembourg. Nexa Resources S.A. operates as a subsidiary of Votorantim S.A.