Olympic Steel (NASDAQ: ZEUS) and Nucor Corporation (NYSE:NUE) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.
This table compares Olympic Steel and Nucor Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Olympic Steel and Nucor Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Olympic Steel||$1.06 billion||0.20||-$1.07 million||$1.11||17.32|
|Nucor Corporation||$16.21 billion||1.09||$796.27 million||$3.44||16.19|
Nucor Corporation has higher revenue and earnings than Olympic Steel. Nucor Corporation is trading at a lower price-to-earnings ratio than Olympic Steel, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
69.2% of Olympic Steel shares are held by institutional investors. Comparatively, 74.6% of Nucor Corporation shares are held by institutional investors. 18.3% of Olympic Steel shares are held by insiders. Comparatively, 0.7% of Nucor Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for Olympic Steel and Nucor Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Olympic Steel presently has a consensus target price of $23.50, indicating a potential upside of 22.20%. Nucor Corporation has a consensus target price of $67.44, indicating a potential upside of 21.07%. Given Olympic Steel’s higher possible upside, equities research analysts plainly believe Olympic Steel is more favorable than Nucor Corporation.
Volatility & Risk
Olympic Steel has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500. Comparatively, Nucor Corporation has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.
Olympic Steel pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Nucor Corporation pays an annual dividend of $1.51 per share and has a dividend yield of 2.7%. Olympic Steel pays out 7.2% of its earnings in the form of a dividend. Nucor Corporation pays out 43.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Nucor Corporation has increased its dividend for 43 consecutive years. Nucor Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Nucor Corporation beats Olympic Steel on 12 of the 17 factors compared between the two stocks.
Olympic Steel Company Profile
Olympic Steel, Inc. is a metals service center. The Company provides metals processing and distribution services for a range of customers. The Company operates through three segments: carbon flat products, specialty metals flat products, and tubular and pipe products. The Company’s carbon flat products segment’s focus is on the direct sale and distribution of large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. The Company’s specialty metals flat products segment’s focus is on the direct sale and distribution of processed aluminum and stainless flat-rolled sheet and coil products, flat bar products and fabricated parts. The Company’s tubular and pipe products segment consists of the Chicago Tube and Iron Company (CTI) business. Through its tubular and pipe products segment, it distributes metals tubing, pipe, bar, valve and fittings, and fabricate pressure parts supplied to various industrial markets.
Nucor Corporation Company Profile
Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.
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