Head to Head Contrast: Ternium (NYSE:TX) vs. National Steel (NYSE:SID)

National Steel (NYSE:SID) and Ternium (NYSE:TX) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for National Steel and Ternium, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Steel	1	0	0	0	1.00
Ternium	2	2	2	0	2.00

National Steel currently has a consensus target price of $1.30, indicating a potential upside of 3.59%. Ternium has a consensus target price of $32.8333, indicating a potential upside of 3.12%. Given National Steel’s higher possible upside, equities analysts clearly believe National Steel is more favorable than Ternium.

Institutional and Insider Ownership

12.0% of Ternium shares are owned by institutional investors. 0.0% of National Steel shares are owned by insiders. Comparatively, 0.0% of Ternium shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

National Steel has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500. Comparatively, Ternium has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500.

Profitability

This table compares National Steel and Ternium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Steel	-5.06%	-13.90%	-2.21%
Ternium	3.66%	1.95%	1.35%

Dividends

National Steel pays an annual dividend of $0.10 per share and has a dividend yield of 8.0%. Ternium pays an annual dividend of $3.60 per share and has a dividend yield of 11.3%. National Steel pays out -34.5% of its earnings in the form of a dividend. Ternium pays out 118.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares National Steel and Ternium”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Steel	$8.10 billion	0.21	-$480.53 million	($0.29)	-4.33
Ternium	$17.65 billion	0.36	-$53.67 million	$3.03	10.51

Ternium has higher revenue and earnings than National Steel. National Steel is trading at a lower price-to-earnings ratio than Ternium, indicating that it is currently the more affordable of the two stocks.

Summary

Ternium beats National Steel on 13 of the 16 factors compared between the two stocks.

About National Steel

Companhia Siderúrgica Nacional operates as an integrated steel producer in Brazil and Latin America. It operates through five segments: Steel Industry, Mining, Logistics, Energy, and Cement. The company offers flat steel products, such as hot and cold rolled, galvanized, galvalume, pre-painted, and metal sheets products; coil, sheets, and derivatives; tiles and derivatives, pipes, and profiles; long steel products; steel packaging solutions for the food industry; chemical packaging solution; and carbochemical products. It also provides steel cutting services; produces and sells cement; operates railway and port facilities; and generates electric power from its thermoelectric co-generation and hydroelectric power plants. In addition, the company explores for iron ore reserves at Casa de Pedra and Engenho mines located in the city of Congonhas; and limestone and dolomite at the Bocaina mine located in the city of Arcos in the state of Minas Gerais, Brazil, as well as produces tin. Companhia Siderúrgica Nacional was founded in 1941 and is headquartered in São Paulo, Brazil.

About Ternium

Ternium S.A., together with its subsidiaries, manufactures and distributes steel products in Mexico, Southern Region, Brazil, and internationally. It operates through three segments: Steel, Mining, and Usiminas. The Steel segment offers slabs, hot and cold rolled products, coated products, roll formed and tubular products, bars, billets, and other products. Its Mining segment sells iron ore and pellets. The Usiminas segment offers iron ore extraction, steel transformation, and production of capital goods and logistics; and manufactures and sells various products and raw materials, such as flat steel, iron ore, and stamped steel parts for the automotive industry and products for the civil construction and capital goods industry. It also provides medical and social; scrap; renewable energy; and engineering and other services, as well as operates as a distribution company. In addition, the company engages in the exploration, exploitation, and pelletizing of iron ore. Ternium S.A. was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.