Critical Analysis: Materion (NYSE:MTRN) & Ero Copper (NYSE:ERO)

Ero Copper (NYSE:ERO) and Materion (NYSE:MTRN) are both mid-cap materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Institutional & Insider Ownership

71.3% of Ero Copper shares are owned by institutional investors. Comparatively, 93.6% of Materion shares are owned by institutional investors. 2.8% of Materion shares are owned 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.

Risk and Volatility

Ero Copper has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Materion has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Ero Copper and Materion, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ero Copper	1	10	5	2	2.44
Materion	0	1	3	1	3.00

Ero Copper presently has a consensus target price of $32.33, suggesting a potential upside of 0.14%. Materion has a consensus target price of $310.00, suggesting a potential upside of 24.84%. Given Materion’s stronger consensus rating and higher probable upside, analysts clearly believe Materion is more favorable than Ero Copper.

Valuation and Earnings

This table compares Ero Copper and Materion”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ero Copper	$785.80 million	4.29	$263.72 million	$2.98	10.83
Materion	$1.79 billion	2.90	$74.82 million	$4.29	57.88

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

Profitability

This table compares Ero Copper and Materion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ero Copper	29.79%	30.32%	15.17%
Materion	4.29%	13.38%	6.98%

Summary

Ero Copper beats Materion on 8 of the 15 factors compared between the two stocks.

About Ero Copper

Ero Copper Corp. engages in the exploration, development, and production of mining projects in Brazil. The company is involved in the production and sale of copper concentrate from the Caraíba operations located in the Curaçá Valley, northeastern Bahia state, Brazil, as well as gold and silver by-products. It also holds 100% interests in the Tucumã project, a copper development project located within southeastern Pará state; and the Xavantina Operations located in Mato Grosso state. Ero Copper Corp. was incorporated in 2016 and is headquartered in Vancouver, Canada.

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.