Materion Corporation (NYSE: MTRN) and Aqua Metals (NASDAQ:AQMS) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitabiliy, valuation, risk, dividends and analyst recommendations.
Profitability
This table compares Materion Corporation and Aqua Metals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Materion Corporation | 2.40% | 5.50% | 3.62% |
| Aqua Metals | N/A | -31.86% | -24.73% |
Analyst Recommendations
This is a summary of current recommendations for Materion Corporation and Aqua Metals, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Materion Corporation | 0 | 1 | 0 | 0 | 2.00 |
| Aqua Metals | 0 | 0 | 6 | 0 | 3.00 |
Materion Corporation presently has a consensus price target of $34.50, indicating a potential downside of 8.12%. Aqua Metals has a consensus price target of $28.60, indicating a potential upside of 138.93%. Given Aqua Metals’ stronger consensus rating and higher probable upside, analysts clearly believe Aqua Metals is more favorable than Materion Corporation.
Dividends
Materion Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. Aqua Metals does not pay a dividend. Materion Corporation pays out 34.8% of its earnings in the form of a dividend. Aqua Metals has raised its dividend for 4 consecutive years.
Volatility and Risk
Materion Corporation has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Aqua Metals has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.
Institutional and Insider Ownership
89.6% of Materion Corporation shares are held by institutional investors. Comparatively, 40.1% of Aqua Metals shares are held by institutional investors. 2.9% of Materion Corporation shares are held by company insiders. Comparatively, 19.7% of Aqua Metals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Materion Corporation and Aqua Metals’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Materion Corporation | $974.39 million | 0.77 | $69.99 million | $1.15 | 32.65 |
| Aqua Metals | N/A | N/A | -$13.69 million | ($0.99) | -12.09 |
Materion Corporation has higher revenue and earnings than Aqua Metals. Aqua Metals is trading at a lower price-to-earnings ratio than Materion Corporation, indicating that it is currently the more affordable of the two stocks.
Summary
Materion Corporation beats Aqua Metals on 8 of the 15 factors compared between the two stocks.
Materion Corporation Company Profile
Materion Corporation, through its subsidiaries, is an integrated producer of engineered materials used in a range of electrical, electronic, thermal, and structural applications. The Company operates in four segments: Performance Alloys and Composites, Advanced Materials, Precision Coatings, and Other. The Performance Alloys and Composites segment consists of businesses, such as Performance Metals and Technical Materials. The Advanced Materials segment produces chemicals, microelectronics packaging, precious metal, non-precious metal and specialty metal products. The Precision Coatings segment includes units, such as Precision Optics and Large Area Coatings. Its products include inorganic chemicals and powders, specialty coatings, specialty engineered beryllium and copper-based alloys, beryllium composites, ceramics and engineered clad, and plated metal systems.
Aqua Metals Company Profile
Aqua Metals, Inc. is engaged in the business of recycling lead through a process that the Company developed and named AquaRefining. The Company’s AquaRefining process focuses on providing for the recycling of lead acid batteries (LABs) and the production of lead. AquaRefining uses bio-degradable aqueous solvent and an ambient temperature electro-chemical process to produce lead. The modular nature of AquaRefining makes it possible to start LAB recycling at a much smaller scale than is possible with smelters. Its AquaRefining process begins with the crushing of used LABs and the separation of the metallic lead, active material (lead compounds), sulfuric acid and plastic for recycling. The active material is dissolved in its solvent. The primary lead is then stripped from the solvent using its automated process allowing the solvent to be reused continuously and indefinitely. As of December 31, 2016, the Company had not generated revenues.
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