Critical Contrast: Noranda Aluminum (NORNQ) and Alcoa (AA)

Noranda Aluminum (OTCMKTS: NORNQ) and Alcoa (NYSE:AA) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Profitability

This table compares Noranda Aluminum and Alcoa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noranda Aluminum N/A N/A N/A
Alcoa 2.61% 4.90% 2.32%

Analyst Recommendations

This is a breakdown of current ratings for Noranda Aluminum and Alcoa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noranda Aluminum 0 0 0 0 N/A
Alcoa 0 5 11 1 2.76

Alcoa has a consensus target price of $50.64, indicating a potential upside of 21.62%. Given Alcoa’s higher possible upside, analysts clearly believe Alcoa is more favorable than Noranda Aluminum.

Valuation and Earnings

This table compares Noranda Aluminum and Alcoa’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Noranda Aluminum $1.23 billion 0.00 -$259.60 million N/A N/A
Alcoa $9.32 billion 0.83 -$400.00 million $1.53 27.22

Noranda Aluminum has higher earnings, but lower revenue than Alcoa.

Summary

Alcoa beats Noranda Aluminum on 8 of the 9 factors compared between the two stocks.

Noranda Aluminum Company Profile

Noranda Aluminum Holding Corporation is a producer of primary aluminum, alumina, bauxite and rolled aluminum coils. The Company produces aluminum products in a range of forms, such as billet, rod, sow and foundry. The Company operates through five segments: Bauxite, Alumina, Primary Aluminum, Flat-Rolled Products and Corporate. The Company has two businesses: Upstream Business and Downstream Business. Its Upstream Business consists of three segments: Primary Aluminum, Alumina and Bauxite. The Primary segment consists of a smelter near New Madrid, Missouri (New Madrid). The Alumina segment consists of an alumina refinery near Gramercy, Louisiana (Gramercy). The Bauxite segment consists of a bauxite mining operation (St. Ann). Its Downstream Business consists of its Flat-Rolled Products segment, which is an aluminum foil producer in North America, and consists of approximately four rolling mills at approximately three facilities.

Alcoa Company Profile

Alcoa Corporation, formerly Alcoa Upstream Corporation, is engaged in the production of bauxite, alumina and aluminum of various cast and rolled products. The Company is engaged in the production and management of aluminum and alumina combined through its participation in various aspects of the industry, such as technology, mining, refining, smelting, and recycling. The Company’s segments include Bauxite, Alumina, Aluminum, Cast Products, Energy and Rolled Products. The Company’s Bauxite segment represents its global portfolio of bauxite mining assets. The Company’s Alumina segment represents its refining system across the world, and processes bauxite into alumina and sells it directly to internal and external smelter customers across the world. The Company’s Aluminum segment represents its smelter system across the world. Its Energy segment represents its portfolio of energy assets, with power production capacity of approximately 1,685 megawatts.

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