Alcoa vs Century Aluminum: Side-by-Side in a Supply-Disrupted Market

Data as of: FY2025 (ended December 2025)

Overview

Aluminum markets are navigating a period of persistent supply disruption—from European smelter curtailments to Chinese capacity caps and escalating tariff pressures. Two US-listed aluminum producers sit at the center of this story: Alcoa Corporation (AA), the vertically integrated global giant, and Century Aluminum (CENX), the pure-play domestic smelter. Both stocks have surged over the past year, but their financial profiles tell starkly different stories about scale, profitability, and positioning.

The Comparison

Revenue & Scale

Alcoa generates 5x the revenue of Century, reflecting its vertically integrated model spanning bauxite mining, alumina refining, and aluminum smelting across multiple continents. Century, focused almost entirely on primary aluminum smelting at US facilities, is the smaller but faster-growing operation. Century's 13.9% top-line growth outpaced Alcoa's 4.5%, driven by higher realized aluminum prices flowing through a leaner cost base.

Profitability

Alcoa's profitability dominates across every metric. Its 14.6% EBITDA margin is nearly 2.5x Century's 6.0%, and its net margin of 9.0% dwarfs Century's razor-thin 1.7%. Alcoa's vertical integration provides a structural margin advantage—when alumina prices spike (as they did in 2025), Alcoa captures that margin internally while Century faces it as an input cost.

Notably, Century's FY2025 earnings collapsed from FY2024 levels ($41.8M vs $336.8M net income). However, FY2024 was inflated by a $246.8M gain in Q1 2024. Stripping that out, Century's underlying earnings trajectory has actually improved, with Q4 2025 revenue of $633.7M representing the highest quarterly figure in recent history.

Balance Sheet & Financial Health

This is where the divergence is most dramatic. Alcoa has essentially eliminated its debt, ending Q4 2025 with just $1M in total debt against $1.6B in cash—a fortress balance sheet. Century carries $548M in debt, much of it tied to the financing of its new $5B+ Green Aluminum smelter in Mississippi, pushing net debt/EBITDA to a stretched 2.7x.

Alcoa's FCF of $567M in FY2025 gives it enormous flexibility for buybacks, dividends, or opportunistic M&A. Century's $84.8M FCF, while positive, is largely spoken for given its capex-heavy buildout phase.

Valuation

On trailing metrics, Alcoa is dramatically cheaper—14.8x earnings vs Century's 138.5x, and 8.6x EV/EBITDA vs 41.3x. Century's trailing multiples are distorted by depressed FY2025 earnings, but even on forward estimates, the gap persists. Century's forward P/E of 7.4x implies analysts expect a massive earnings inflection, likely tied to tariff benefits and the new smelter ramping.

Stock Performance

Century has been the clear momentum winner, more than tripling over the past year vs Alcoa's (still impressive) doubling. The market is pricing Century's tariff-and-reshoring optionality at a premium, betting that US aluminum protection will disproportionately benefit the pure domestic producer.

Key Takeaways

1. Alcoa wins on fundamentals: Higher margins (14.6% vs 6.0% EBITDA), a debt-free balance sheet, and $1.15B in net income make it the superior business today.

2. Century wins on narrative: The combination of Section 232 tariffs, the bipartisan push for domestic aluminum supply, and the $5B+ Mississippi smelter project give CENX asymmetric upside if the policy tailwinds persist.

3. Risk profiles differ sharply: Alcoa's diversified global footprint hedges against any single policy shift. Century's concentrated US operations are a leveraged bet on domestic aluminum protection—high reward if tariffs hold, high risk if they don't.

Investment Implications

Who to Own

Alcoa (AA) is the quality compounder. At 13.1x forward earnings with a net cash balance sheet and 15.8% ROIC, it offers both value and a margin of safety. If aluminum prices stay elevated, Alcoa's vertically integrated margin capture is unmatched.

Who to Watch

Century Aluminum (CENX) is the higher-beta trade. Its forward P/E of 7.4x screens cheap, but that depends on a major earnings recovery materializing. The Mississippi smelter is a transformative project—if completed on budget, it could double Century's domestic capacity. But execution risk and $548M in existing debt make this a show-me story.

What to Watch

• Tariff policy developments: Any rollback of Section 232 tariffs would hit CENX disproportionately hard
• Mississippi smelter milestones: Permits, DOE loan finalization, and construction timelines
• Alumina pricing: High alumina costs squeeze Century's margins while benefiting Alcoa's refining segment
• Q1 2026 earnings: Both companies report in April—watch for margin trajectory divergence

Sources: Alcoa Corporation FY2025 10-K filing, Century Aluminum FY2025 10-K filing, company earnings releases.