Metal-matrix composite was a blend of fine aluminum powder serving as a matrix while neodymium or aluminium oxide with 10% of volume ratio as a ceramic inclusion. Samples of the cylinder shape were manufactured used powder metallurgy method. All samples dimensions were 12.7 mm in diameter and 4 mm in height. The aim of this study was to measure the microhardness, density, porosity and thermal conductivity of the material, as well as its SEM analysis. The metallographic analysis of the composite showed a uniform distribution of ceramic inclusions with an average size of 0.8–1.2 mm and a high porosity of 5.3–5.5% in volume. The research results of the properties of aluminum composites with various oxide inclusions were compared. Their thermal properties differ significantly, while the mechanical properties vary within the same limits. The obtained values are determined by the structure of composite and its production technology. They can be used to predict of the material behavior under external influences.