Analyzing BAE Systems (OTCMKTS:BAESY) and Kumba Iron Ore (OTCMKTS:KIROY)

Kumba Iron Ore (OTCMKTS:KIROY) and BAE Systems (OTCMKTS:BAESY) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Analyst Recommendations

This is a summary of recent recommendations for Kumba Iron Ore and BAE Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kumba Iron Ore	0	1	0	0	2.00
BAE Systems	1	2	2	0	2.20

BAE Systems has a consensus target price of $475.00, indicating a potential upside of 623.20%. Given BAE Systems’ stronger consensus rating and higher possible upside, analysts clearly believe BAE Systems is more favorable than Kumba Iron Ore.

Dividends

Kumba Iron Ore pays an annual dividend of $0.64 per share and has a dividend yield of 7.7%. BAE Systems pays an annual dividend of $1.82 per share and has a dividend yield of 2.8%.

Insider & Institutional Ownership

0.2% of BAE Systems shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Kumba Iron Ore has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, BAE Systems has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Profitability

This table compares Kumba Iron Ore and BAE Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kumba Iron Ore	N/A	N/A	N/A
BAE Systems	N/A	N/A	N/A

Valuation & Earnings

This table compares Kumba Iron Ore and BAE Systems’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kumba Iron Ore	$4.68 billion	1.71	$1.23 billion	N/A	N/A
BAE Systems	$24.98 billion	1.99	$2.31 billion	N/A	N/A

BAE Systems has higher revenue and earnings than Kumba Iron Ore.

Summary

BAE Systems beats Kumba Iron Ore on 7 of the 9 factors compared between the two stocks.

About Kumba Iron Ore

Kumba Iron Ore Limited, together with its subsidiaries, engages in the exploration, extraction, beneficiation, marketing, sale, and shipping of iron ore for the steel industry primarily in South Africa, China, rest of Asia, Europe, the Middle East, and North Africa. It produces iron ore at Sishen and Kolomela mines in the Northern Cape Province. The company is also involved in the operation of a port in Saldanha Bay in the Western Cape Province. Kumba Iron Ore Limited was incorporated in 2005 and is headquartered in Johannesburg, South Africa. Kumba Iron Ore Limited operates as a subsidiary of Anglo South Africa (Pty) Ltd.

About BAE Systems

BAE Systems plc provides defense, aerospace, and security solutions worldwide. The company operates through five segments: Electronic Systems, Platforms & Services, Air, Maritime, and Cyber & Intelligence. The Electronic Systems segment offers electronic warfare systems, navigation systems, electro-optical sensors, military and commercial digital engine and flight controls, precision guidance and seeker solutions, military communication systems and data links, persistent surveillance capabilities, space electronics, and electric drive propulsion systems. The Cyber & Intelligence segment provides solutions to modernize, maintain, and test cyber-harden aircraft, radars, missile systems, and mission applications that detect and deter threats to national security; systems engineering, integration, and sustainment services for critical weapons systems, C5ISR, and cyber security; and solutions and services to intelligence and federal/civilian agencies. It also offers data intelligence solutions to protect nations, businesses, and citizens. The Platforms & Services segment manufactures, and upgrades combat vehicles, weapons, and munitions, as well as provides naval ship repair services and the management of government-owned ammunition plants. The Air segment develops future combat air systems and falconworks. The Maritime segment provides maritime and land activities, including submarine, ship build, and support programmes. BAE Systems plc was founded in 1970 and is headquartered in Camberley, the United Kingdom.