National Steel (NYSE: SID) and Steel Dynamics (NASDAQ:STLD) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.
This table compares National Steel and Steel Dynamics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
National Steel has a beta of 2.27, suggesting that its share price is 127% more volatile than the S&P 500. Comparatively, Steel Dynamics has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for National Steel and Steel Dynamics, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Steel Dynamics has a consensus target price of $41.21, suggesting a potential upside of 19.32%. Given Steel Dynamics’ higher probable upside, analysts clearly believe Steel Dynamics is more favorable than National Steel.
Steel Dynamics pays an annual dividend of $0.62 per share and has a dividend yield of 1.8%. National Steel does not pay a dividend. Steel Dynamics pays out 28.6% of its earnings in the form of a dividend. National Steel has increased its dividend for 2 consecutive years.
Insider & Institutional Ownership
3.4% of National Steel shares are held by institutional investors. Comparatively, 84.1% of Steel Dynamics shares are held by institutional investors. 4.2% of Steel Dynamics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares National Steel and Steel Dynamics’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|National Steel||$5.23 billion||0.68||$935.96 million||$0.25||10.48|
|Steel Dynamics||$8.77 billion||0.95||$1.37 billion||$2.17||15.92|
Steel Dynamics has higher revenue and earnings than National Steel. National Steel is trading at a lower price-to-earnings ratio than Steel Dynamics, indicating that it is currently the more affordable of the two stocks.
Steel Dynamics beats National Steel on 13 of the 16 factors compared between the two stocks.
About National Steel
Companhia Siderurgica Nacional is a Brazil-based company engaged in the steel industry. The Company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a range of steel products, including coated galvanized flat steel and tinplate. The Company operates in five segments: Steel, Mining, Cement, Logistics and Energy. The Steel segment focuses on the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel, with operations in Brazil, the United States, Portugal and Germany. The Mining segment encompasses the activities of iron ore and tin mining. The Cement segment is responsible for the cement production, distribution and sale operations. The Logistics segment manages port terminal for containers, as well as railway networks. The Energy segment includes generation of electric power. The Company is controlled by Vicunha Acos SA.
About Steel Dynamics
Steel Dynamics, Inc. is a steel producing and a metal recycling company. The Company is engaged in the manufacture and sale of steel products, processing and sale of recycled ferrous and nonferrous metals, and fabrication and sale of steel joists and deck products. Its segments include steel operations, metals recycling operations, steel fabrication operations and Other Operations. It offers a range of steel products, such as sheet products, long products and steel finishing. The steel operations segment includes Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia and Iron Dynamics. The metals recycling operations segment consists of OmniSource Corporation. The fabrication operations produce steel building components. The Other Operations segment consists of subsidiary operations and smaller joint ventures.
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