Better Buy: Freeport-McMoRan Inc. vs. Alcoa Corp
At their core, Freeport-McMoRan Inc. (NYSE: FCX) and Alcoa Corp (NYSE: AA) are reliant on commodity prices to support their top and bottom lines. Freeport's specialty is copper and gold mining, and Alcoa is a vertically integrated aluminum producer. Both have made significant progress in recent years to shift gears and improve the fundamentals underpinning their businesses. However, Alcoa is dealing with fewer distractions, and that makes it a better option today.
The big story at Alcoa was its late 2016 separation from specialty parts maker Arconic. But leading up to that breakup, Alcoa was working hard to improve its industry position. For example, in 2010 the company was in the second quartile of the cost curve for alumina production and the third quartile for aluminum. Today it's in the middle of the first quartile on the alumina curve and the middle of the second for aluminum. The company got there by closing older, less efficient operations and focusing on improving efficiency.
Image source: Getty Images.
Source: Fool.com
