Head to Head Survey: Labrador Iron Ore Royalty (OTCMKTS:LIFZF) versus Outokumpu Oyj (OTCMKTS:OUTKY)

Outokumpu Oyj (OTCMKTS:OUTKY) and Labrador Iron Ore Royalty (OTCMKTS:LIFZF) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Institutional and Insider Ownership

32.4% of Labrador Iron Ore Royalty shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Outokumpu Oyj pays an annual dividend of $0.06 per share and has a dividend yield of 3.0%. Labrador Iron Ore Royalty pays an annual dividend of $0.50 per share and has a dividend yield of 2.3%. Outokumpu Oyj pays out -54.5% of its earnings in the form of a dividend. Labrador Iron Ore Royalty pays out 21.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Outokumpu Oyj is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Outokumpu Oyj and Labrador Iron Ore Royalty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Outokumpu Oyj	-1.52%	-2.74%	-1.73%
Labrador Iron Ore Royalty	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current ratings and price targets for Outokumpu Oyj and Labrador Iron Ore Royalty, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Outokumpu Oyj	0	3	1	0	2.25
Labrador Iron Ore Royalty	0	0	0	0	N/A

Labrador Iron Ore Royalty has a consensus target price of $45.00, indicating a potential upside of 109.59%. Given Labrador Iron Ore Royalty’s higher probable upside, analysts clearly believe Labrador Iron Ore Royalty is more favorable than Outokumpu Oyj.

Earnings and Valuation

This table compares Outokumpu Oyj and Labrador Iron Ore Royalty’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outokumpu Oyj	$7.53 billion	N/A	-$114.72 million	($0.11)	-18.00
Labrador Iron Ore Royalty	N/A	N/A	N/A	$2.37	9.06

Labrador Iron Ore Royalty has lower revenue, but higher earnings than Outokumpu Oyj. Outokumpu Oyj is trading at a lower price-to-earnings ratio than Labrador Iron Ore Royalty, indicating that it is currently the more affordable of the two stocks.

Summary

Labrador Iron Ore Royalty beats Outokumpu Oyj on 7 of the 11 factors compared between the two stocks.

About Outokumpu Oyj

Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally. The company operates through three segments: Europe, Americas, and Ferrochrome. It offers cold rolled coils, strips, and sheets; hot rolled coils, strips, and plates; quarto plates; precision strips; and specialized components, such as welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, hardened and customized press plates, suction roll shells, and blancs and disks. The company also provides stainless steel powder which includes Supra 316L, Dura 17-4PH, Ultra 904L, Therma 253MA, Dura 4116, and Ni-free austenitic stainless steel powder; and nickel-based alloys. Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy; marine; and heavy industries. The company was founded in 1910 and is headquartered in Helsinki, Finland.

About Labrador Iron Ore Royalty

Labrador Iron Ore Royalty Corporation, through its subsidiary, Hollinger-Hanna Limited, holds a 15.10% equity interest in Iron Ore Company of Canada (IOC) that produces and processes iron ores at Labrador City, Newfoundland and Labrador. Its primary products include standard and low silica acid, flux, and direct reduction pellets; iron ore concentrate; and seaborne iron ore pellets. The company was formerly known as Labrador Iron Ore Royalty Income Fund and changed its name to Labrador Iron Ore Royalty Corporation in July 2010. The company is based in Toronto, Canada.