Reviewing Materion (NYSE:MTRN) and Centerra Gold (NYSE:CGAU)

Centerra Gold (NYSE:CGAU) and Materion (NYSE:MTRN) are both mid-cap materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Institutional & Insider Ownership

55.4% of Centerra Gold shares are owned by institutional investors. Comparatively, 93.6% of Materion shares are owned by institutional investors. 0.2% of Centerra Gold shares are owned by company insiders. Comparatively, 2.8% of Materion shares are owned 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.

Analyst Recommendations

This is a summary of recent ratings and price targets for Centerra Gold and Materion, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centerra Gold	0	2	5	0	2.71
Materion	0	1	3	1	3.00

Centerra Gold currently has a consensus price target of $21.00, indicating a potential downside of 3.47%. Materion has a consensus price target of $310.00, indicating a potential upside of 18.03%. Given Materion’s stronger consensus rating and higher probable upside, analysts plainly believe Materion is more favorable than Centerra Gold.

Valuation and Earnings

This table compares Centerra Gold and Materion”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centerra Gold	$1.38 billion	3.07	$583.99 million	$3.13	6.95
Materion	$2.10 billion	2.61	$74.82 million	$4.29	61.22

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

Volatility and Risk

Centerra Gold has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Materion has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Profitability

This table compares Centerra Gold and Materion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Centerra Gold	36.92%	15.35%	10.73%
Materion	4.29%	13.38%	6.98%

Dividends

Centerra Gold pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Materion pays an annual dividend of $0.58 per share and has a dividend yield of 0.2%. Centerra Gold pays out 6.4% of its earnings in the form of a dividend. Materion pays out 13.5% 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. Materion has raised its dividend for 13 consecutive years. Centerra Gold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Materion beats Centerra Gold on 10 of the 18 factors compared between the two stocks.

About Centerra Gold

Centerra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects are the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt gold mine located in Turkey. The company was incorporated in 2002 and is based in Toronto, Canada.

About Materion

Materion Corporation, together with its subsidiaries, produces advanced engineered materials used in semiconductor, industrial, aerospace and defense, automotive, energy, consumer electronics, and telecom and data center in the United States, Asia, Europe, and internationally. The company operates in four segments: Performance Materials, Electronic Materials, Precision Optics, and Other. The company provides advanced engineered solutions comprising beryllium and non-beryllium containing alloy systems and custom engineered parts in strip, bulk, rod, plate, bar, tube, and other customized shapes; engineering and product development services; alloyed metals, beryllium products, and beryllium hydroxide; precision strip, rod, and wire products, as well as engineered strip metal products; and ToughMet alloys and SupremEX aluminum silicon carbide metal matrix composite formulation products. It operates the bertrandite ore mine and refinery located in Utah that provides feedstock hydroxide for its beryllium businesses and external sale. In addition, it produces advanced chemicals, microelectronics packaging, precious metal, non-precious metal, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal pre-forms, high temperature braze materials, and ultra-pure wire. Further, the company designs and produces precision thin film coatings, optical filters, and assemblies. The company sells its products directly from its facilities, as well as through company-owned service centers, outside distributors, agents, direct sales offices, and independent sales representatives. The company was formerly known as Brush Engineered Materials Inc. and changed its name to Materion Corporation in March 2011. Materion Corporation was founded in 1921 and is headquartered in Mayfield Heights, Ohio.