Critical Comparison: Norsk Hydro ASA (OTCMKTS:NHYDY) & HudBay Minerals (NYSE:HBM)

Norsk Hydro ASA (OTCMKTS:NHYDY) and HudBay Minerals (NYSE:HBM) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Earnings and Valuation

This table compares Norsk Hydro ASA and HudBay Minerals”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norsk Hydro ASA	$19.41 billion	0.69	$538.47 million	$0.52	13.02
HudBay Minerals	$2.20 billion	2.83	$76.70 million	$0.73	21.52

Norsk Hydro ASA has higher revenue and earnings than HudBay Minerals. Norsk Hydro ASA is trading at a lower price-to-earnings ratio than HudBay Minerals, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Norsk Hydro ASA and HudBay Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norsk Hydro ASA	4.96%	10.39%	5.43%
HudBay Minerals	13.13%	10.73%	5.28%

Dividends

Norsk Hydro ASA pays an annual dividend of $0.15 per share and has a dividend yield of 2.2%. HudBay Minerals pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Norsk Hydro ASA pays out 28.8% of its earnings in the form of a dividend. HudBay Minerals pays out 1.4% 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.

Insider and Institutional Ownership

0.0% of Norsk Hydro ASA shares are owned by institutional investors. Comparatively, 57.8% of HudBay Minerals shares are owned by institutional investors. 0.0% of Norsk Hydro ASA shares are owned by insiders. Comparatively, 0.3% of HudBay Minerals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Norsk Hydro ASA has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500. Comparatively, HudBay Minerals has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Norsk Hydro ASA and HudBay Minerals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norsk Hydro ASA	0	6	1	0	2.14
HudBay Minerals	0	0	10	3	3.23

HudBay Minerals has a consensus target price of $19.50, suggesting a potential upside of 24.14%. Given HudBay Minerals’ stronger consensus rating and higher possible upside, analysts clearly believe HudBay Minerals is more favorable than Norsk Hydro ASA.

Summary

HudBay Minerals beats Norsk Hydro ASA on 13 of the 17 factors compared between the two stocks.

About Norsk Hydro ASA

Norsk Hydro ASA engages in the power production, bauxite extraction, alumina refining, aluminium smelting, and recycling activities; and provision of extruded solutions worldwide. It operates through Hydro Bauxite & Alumina, Hydro Aluminium Metal, Hydro Metal Markets, Hydro Extrusions, and Hydro Energy segments. The Hydro Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, primarily the sale of alumina. The Hydro Aluminium Metal segment is involved in the primary aluminum production casting activities. This segment principally offers extrusion ingots, foundry alloys, and sheet and standard ingots. The Metal Markets segment sells products from the company’s primary metal plants; operates recyclers; and trades in physical and financial metals. The Hydro Extrusions segment offers extrusion profiles, building systems, and precision tubing products for construction, automotive and heating, and ventilation and air conditioning sectors, as well as operates recycling facilities. The Hydro Energy segment engages in the trading and wholesale business in Brazil; energy sourcing operations; and operation of power stations in Norway, as well as renewable energy production, such as wind and solar, battery materials, and green hydrogen. Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.

About HudBay Minerals

Hudbay Minerals Inc., a diversified mining company, focuses on the exploration, development, operation, and optimization of properties in North and South America. It produces copper concentrates containing gold, silver, and molybdenum; gold concentrates containing zinc; zinc concentrates; molybdenum concentrates; and silver/gold doré. The company's flagship project is the 100% owned Constancia mine located in the Province of Chumbivilcas in southern Peru. Hudbay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.