Analyzing Sigma Lithium (NASDAQ:SGML) and Norsk Hydro ASA (OTCMKTS:NHYDY)

Norsk Hydro ASA (OTCMKTS:NHYDY) and Sigma Lithium (NASDAQ:SGML) are both materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Earnings and Valuation

This table compares Norsk Hydro ASA and Sigma Lithium”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norsk Hydro ASA	$20.05 billion	0.79	$647.52 million	$0.52	15.33
Sigma Lithium	$142.49 million	6.94	-$50.19 million	($0.24)	-36.62

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

Profitability

This table compares Norsk Hydro ASA and Sigma Lithium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norsk Hydro ASA	4.90%	11.46%	6.05%
Sigma Lithium	-19.36%	-37.40%	-7.66%

Analyst Recommendations

This is a breakdown of current ratings for Norsk Hydro ASA and Sigma Lithium, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norsk Hydro ASA	1	7	2	1	2.27
Sigma Lithium	3	3	2	0	1.88

Sigma Lithium has a consensus target price of $14.30, indicating a potential upside of 62.68%. Given Sigma Lithium’s higher probable upside, analysts clearly believe Sigma Lithium is more favorable than Norsk Hydro ASA.

Insider & Institutional Ownership

0.0% of Norsk Hydro ASA shares are held by institutional investors. Comparatively, 64.9% of Sigma Lithium shares are held by institutional investors. 0.0% of Norsk Hydro ASA shares are held by insiders. Comparatively, 48.6% of Sigma Lithium shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Norsk Hydro ASA has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Sigma Lithium has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Summary

Norsk Hydro ASA beats Sigma Lithium on 10 of the 14 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 Sigma Lithium

Sigma Lithium Corporation engages in the exploration and development of lithium deposits in Brazil. It holds a 100% interest in the Grota do Cirilo, Genipapo, Santa Clara, and São José properties comprising 29 mineral rights covering an area of approximately 185 square kilometers located in the Araçuaí and Itinga regions of the state of Minas Gerais, Brazil. It serves electric vehicle industries worldwide. The company was formerly known as Sigma Lithium Resources Corporation and changed its name to Sigma Lithium Corporation in July 2021. The company is headquartered in São Paulo, Brazil.