Analyzing Luxfer Holdings PLC (LXFR) and Ferroglobe PLC (NASDAQ:GSM)

Ferroglobe PLC (NASDAQ: GSM) and Luxfer Holdings PLC (NYSE:LXFR) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.

Institutional & Insider Ownership

40.9% of Ferroglobe PLC shares are owned by institutional investors. Comparatively, 84.3% of Luxfer Holdings PLC shares are owned by institutional investors. 13.1% of Ferroglobe PLC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Ferroglobe PLC and Luxfer Holdings PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ferroglobe PLC -7.60% -3.96% -1.94%
Luxfer Holdings PLC 3.85% 14.70% 5.12%

Analyst Recommendations

This is a summary of current ratings for Ferroglobe PLC and Luxfer Holdings PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ferroglobe PLC 0 1 5 0 2.83
Luxfer Holdings PLC 0 0 0 0 N/A

Ferroglobe PLC presently has a consensus target price of $13.85, indicating a potential upside of 4.29%. Given Ferroglobe PLC’s higher possible upside, equities analysts plainly believe Ferroglobe PLC is more favorable than Luxfer Holdings PLC.

Risk and Volatility

Ferroglobe PLC has a beta of 1.76, indicating that its stock price is 76% more volatile than the S&P 500. Comparatively, Luxfer Holdings PLC has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.

Earnings and Valuation

This table compares Ferroglobe PLC and Luxfer Holdings PLC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ferroglobe PLC $1.53 billion 1.49 $32.76 million ($0.69) -19.25
Luxfer Holdings PLC $405.00 million 0.78 $48.00 million $0.58 20.22

Luxfer Holdings PLC has higher revenue, but lower earnings than Ferroglobe PLC. Ferroglobe PLC is trading at a lower price-to-earnings ratio than Luxfer Holdings PLC, indicating that it is currently the more affordable of the two stocks.

Dividends

Luxfer Holdings PLC pays an annual dividend of $0.48 per share and has a dividend yield of 4.1%. Ferroglobe PLC does not pay a dividend. Luxfer Holdings PLC pays out 82.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

About Ferroglobe PLC

Ferroglobe PLC, formerly VeloNewco Limited, is engaged in silicon and specialty metals industry. The Company produces silicon metal and silicon- and manganese-based alloy, which serves customers in the chemical, aluminum, solar, steel and ductile iron foundry industries. It operates through two segments: Electrometallurgy and Energy. It Electrometallurgy segment includes its coal and quartz mining operations and its silicon metal and ferroalloy production, whereas the Energy segment consists of its hydroelectric power operations. It currently operates approximately 20 production smelting facilities in the field of electrometallurgy: approximately five in Spain, over five in the United States of America, over six in France, over three in South Africa, one in Venezuela, one in Poland, one in Canada, one in Argentina and one in China. It diversifies its production base across approximately five continents, such as Africa, Asia, Europe, North America and South America.

About Luxfer Holdings PLC

Luxfer Holdings PLC is a holding company. The Company is a materials technology company specializing in the design, manufacture and supply of materials, components and gas-containment devices for healthcare, environmental, protection and specialty end-markets. It operates through two divisions: Elektron and Gas Cylinders. Its Elektron Division focuses on specialty materials based primarily on magnesium, zirconium and rare earths. It sells its products through two brands, Magnesium Elektron and MEL Chemicals. Its Gas Cylinders Division manufactures and markets specialized products using aluminum, magnesium, carbon composites and steel. It sells its products through two brands, Luxfer Gas Cylinders and Superform. Its customers include both end users of its products and manufacturers that incorporate its products into finished goods. As of December 31, 2016, it had operated 20 manufacturing plants in the United States, the United Kingdom, Canada, France, the Czech Republic and China.

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