Ternium (NYSE:TX) versus Teck Resources (NYSE:TECK) Financial Contrast

Ternium (NYSE:TX) and Teck Resources (NYSE:TECK) are both large-cap materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Dividends

Ternium pays an annual dividend of $2.60 per share and has a dividend yield of 5.0%. Teck Resources pays an annual dividend of $0.35 per share and has a dividend yield of 0.6%. Ternium pays out 73.0% of its earnings in the form of a dividend. Teck Resources pays out 6.3% 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.

Earnings and Valuation

This table compares Ternium and Teck Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ternium	$16.00 billion	0.65	$425.23 million	$3.56	14.57
Teck Resources	$15.12 billion	1.98	$1.00 billion	$5.59	11.06

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Ternium and Teck Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ternium	0	5	6	0	2.55
Teck Resources	0	10	6	0	2.38

Ternium presently has a consensus price target of $55.72, suggesting a potential upside of 7.43%. Teck Resources has a consensus price target of $75.25, suggesting a potential upside of 21.69%. Given Teck Resources’ higher possible upside, analysts clearly believe Teck Resources is more favorable than Ternium.

Insider & Institutional Ownership

12.0% of Ternium shares are held by institutional investors. Comparatively, 78.1% of Teck Resources shares are held by institutional investors. 0.0% of Ternium shares are held by company insiders. Comparatively, 0.1% of Teck Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Ternium and Teck Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ternium	4.37%	4.26%	2.92%
Teck Resources	17.85%	10.42%	6.07%

Volatility & Risk

Ternium has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Teck Resources has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Summary

Teck Resources beats Ternium on 10 of the 15 factors compared between the two stocks.

About Ternium

Ternium S.A., together with its subsidiaries, manufactures and distributes steel products in Mexico, Southern Region, Brazil, and internationally. It operates through three segments: Steel, Mining, and Usiminas. The Steel segment offers slabs, hot and cold rolled products, coated products, roll formed and tubular products, bars, billets, and other products. Its Mining segment sells iron ore and pellets. The Usiminas segment offers iron ore extraction, steel transformation, and production of capital goods and logistics; and manufactures and sells various products and raw materials, such as flat steel, iron ore, and stamped steel parts for the automotive industry and products for the civil construction and capital goods industry. It also provides medical and social; scrap; renewable energy; and engineering and other services, as well as operates as a distribution company. In addition, the company engages in the exploration, exploitation, and pelletizing of iron ore. Ternium S.A. was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.

About Teck Resources

Teck Resources Limited engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. The company operates through Steelmaking Coal, Copper, Zinc, and Energy segments. Its principal products include copper, zinc, steelmaking coal, and blended bitumen. The company also produces lead, silver, and molybdenum; and various specialty and other metals, chemicals, and fertilizers. In addition, it explores for gold. The company was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in April 2009. The company was founded in 1913 and is headquartered in Vancouver, Canada.