Critical Comparison: Salzgitter (OTCMKTS:SZGPY) and Usinas Siderurgicas de Minas Gerais (OTCMKTS:USNZY)

Salzgitter (OTCMKTS:SZGPY) and Usinas Siderurgicas de Minas Gerais (OTCMKTS:USNZY) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current ratings for Salzgitter and Usinas Siderurgicas de Minas Gerais, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Salzgitter	2	2	1	1	2.17
Usinas Siderurgicas de Minas Gerais	0	1	0	0	2.00

Earnings and Valuation

This table compares Salzgitter and Usinas Siderurgicas de Minas Gerais”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Salzgitter	$10.83 billion	0.15	-$381.12 million	($0.86)	-3.59
Usinas Siderurgicas de Minas Gerais	$4.80 billion	0.13	-$27.06 million	($0.49)	-2.27

Usinas Siderurgicas de Minas Gerais has lower revenue, but higher earnings than Salzgitter. Salzgitter is trading at a lower price-to-earnings ratio than Usinas Siderurgicas de Minas Gerais, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Salzgitter and Usinas Siderurgicas de Minas Gerais’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Salzgitter	-4.45%	-9.40%	-4.03%
Usinas Siderurgicas de Minas Gerais	-12.91%	1.19%	0.79%

Volatility and Risk

Salzgitter has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, Usinas Siderurgicas de Minas Gerais has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.

Summary

Salzgitter beats Usinas Siderurgicas de Minas Gerais on 7 of the 12 factors compared between the two stocks.

About Salzgitter

Salzgitter AG, together with its subsidiaries, engages in steel and technology businesses worldwide. It operates through four segments: Steel Production, Steel Processing, Trading, and Technology. The Steel Production segment manufactures steel and special steels, such as hot-rolled wide strip, steel sheet, sections, tailored blanks, as well as scrap trading. The Steel Processing segment produces various high-grade heavy plates; and manufactures line pipes, HFI-welded tubes, and precision and stainless-steel tubes. The Trading segment operates a European sales network, as well as trading companies and agencies worldwide. The Technology segment engages in the provision of machinery and plants for the filling and packaging of beverages, as well as special machinery engineering for shoe manufacturing and elastomer production. The company also provides IT, facility management, logistics, automotive engineering, and research and development services, as well as supplies raw materials. The company was founded in 1858 and is headquartered in Salzgitter, Germany.

About Usinas Siderurgicas de Minas Gerais

Usinas Siderúrgicas de Minas Gerais S.A. manufactures and markets flat steel products in Brazil and internationally. The company operates through three segments: Mining and Logistics, Steel Metallurgy, and Steel Transformation. It extracts and process iron ore, such as pellet and sinter feed and, granulated iron ore; provides storage, handling, and road cargo transportation services; and operates highway and railway cargo terminals. It also manufactures and sells steel products; manufactures and installs equipment for various industries; and transforms cold-rolled coils into hot-dip galvanized coils. In addition, the company provides technology transfer services for steel industry; project management and services for civil construction and capital goods industry; road transportation of flat steel; and texturing and chrome plating of cylinders. It serves automotive, construction, distribution, energy, white line, oil and gas, and machines and equipment markets. Usinas Siderúrgicas de Minas Gerais S.A. was founded in 1956 and is headquartered in Belo Horizonte, Brazil.