Analyzing Ternium (NYSE:TX) and North American Construction Group (NYSE:NOA)

Ternium (NYSE:TX) and North American Construction Group (NYSE:NOA) are both materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Volatility & Risk

Ternium has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, North American Construction Group has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Ternium and North American Construction Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ternium	4.37%	4.26%	2.92%
North American Construction Group	2.41%	6.23%	1.50%

Earnings and Valuation

This table compares Ternium and North American Construction Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ternium	$15.61 billion	0.73	$425.23 million	$3.56	16.01
North American Construction Group	$919.14 million	0.37	$24.22 million	$0.79	15.47

Ternium has higher revenue and earnings than North American Construction Group. North American Construction Group is trading at a lower price-to-earnings ratio than Ternium, indicating that it is currently the more affordable of the two stocks.

Dividends

Ternium pays an annual dividend of $2.60 per share and has a dividend yield of 4.6%. North American Construction Group pays an annual dividend of $0.34 per share and has a dividend yield of 2.8%. Ternium pays out 73.0% of its earnings in the form of a dividend. North American Construction Group pays out 43.0% 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. North American Construction Group has raised its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for Ternium and North American Construction Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ternium	0	4	6	1	2.73
North American Construction Group	1	4	2	0	2.14

Ternium currently has a consensus price target of $55.72, indicating a potential downside of 2.22%. North American Construction Group has a consensus price target of $25.75, indicating a potential upside of 110.72%. Given North American Construction Group’s higher probable upside, analysts clearly believe North American Construction Group is more favorable than Ternium.

Institutional and Insider Ownership

12.0% of Ternium shares are owned by institutional investors. Comparatively, 75.0% of North American Construction Group shares are owned by institutional investors. 0.0% of Ternium shares are owned by company insiders. Comparatively, 9.7% of North American Construction Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Ternium beats North American Construction Group on 12 of the 18 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 North American Construction Group

North American Construction Group Ltd. provides mining and heavy civil construction services to customers in the resource development and industrial construction sectors in Australia, Canada, and the United States. The company operates Heavy Equipment – Canada, Heavy Equipment – Australia, and Other segments. It also offers mine management services for thermal coal mines; and construction and operations support services in the Canadian oil sands region. In addition, the company provides fully maintained heavy equipment rentals and full service mine operations support at metallurgical and thermal coal mines; heavy equipment rentals to iron ore, gold and lithium producers; and heavy equipment maintenance, component remanufacturing, and full equipment rebuild services to mining companies and other heavy equipment operators, as well as supplies production-critical components to the mining and construction industry. As of December 31, 2023, it operated a heavy equipment fleet of 900 units. The company was formerly known as North American Energy Partners Inc. and changed its name to North American Construction Group Ltd. in April 2018. North American Construction Group Ltd. was incorporated in 1953 and is headquartered in Acheson, Canada.