Mesabi Trust (NYSE:MSB) and Salzgitter (OTCMKTS:SZGPY) Critical Survey

Mesabi Trust (NYSE:MSB) and Salzgitter (OTCMKTS:SZGPY) are both materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Dividends

Mesabi Trust pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Salzgitter pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Mesabi Trust pays out 23.3% of its earnings in the form of a dividend. Salzgitter pays out 8.3% 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Mesabi Trust and Salzgitter, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mesabi Trust	0	1	0	0	2.00
Salzgitter	0	3	5	0	2.62

Volatility & Risk

Mesabi Trust has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Salzgitter has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500.

Profitability

This table compares Mesabi Trust and Salzgitter’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mesabi Trust	75.32%	54.83%	46.67%
Salzgitter	0.65%	1.30%	0.55%

Earnings & Valuation

This table compares Mesabi Trust and Salzgitter”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mesabi Trust	$17.52 million	17.05	$13.87 million	$0.86	26.48
Salzgitter	$10.16 billion	0.36	-$83.95 million	$0.12	57.00

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

Summary

Mesabi Trust beats Salzgitter on 7 of the 13 factors compared between the two stocks.

About Mesabi Trust

Mesabi Trust, a royalty trust, engages in iron ore mining business in the United States. Mesabi Trust was founded in 1961 and is based in New York, New York.

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.