Analyzing Olympic Steel (NASDAQ:ZEUS) & Freeport-McMoRan (NYSE:FCX)

Freeport-McMoRan (NYSE:FCX) and Olympic Steel (NASDAQ:ZEUS) are both materials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a summary of current ratings for Freeport-McMoRan and Olympic Steel, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freeport-McMoRan	0	4	20	1	2.88
Olympic Steel	0	1	0	0	2.00

Freeport-McMoRan presently has a consensus price target of $76.27, suggesting a potential upside of 15.70%. Given Freeport-McMoRan’s stronger consensus rating and higher possible upside, research analysts clearly believe Freeport-McMoRan is more favorable than Olympic Steel.

Volatility & Risk

Freeport-McMoRan has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, Olympic Steel has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.

Profitability

This table compares Freeport-McMoRan and Olympic Steel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freeport-McMoRan	N/A	N/A	N/A
Olympic Steel	0.73%	2.11%	1.14%

Dividends

Freeport-McMoRan pays an annual dividend of $0.30 per share and has a dividend yield of 0.5%. Olympic Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. Freeport-McMoRan pays out 14.8% of its earnings in the form of a dividend. Olympic Steel pays out 54.7% 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. Olympic Steel has raised its dividend for 4 consecutive years. Olympic Steel is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Freeport-McMoRan and Olympic Steel”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freeport-McMoRan	$25.87 billion	3.66	$2.92 billion	$2.03	32.47
Olympic Steel	$1.90 billion	0.28	$22.98 million	$1.17	40.91

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

Institutional & Insider Ownership

80.8% of Freeport-McMoRan shares are owned by institutional investors. Comparatively, 87.1% of Olympic Steel shares are owned by institutional investors. 0.7% of Freeport-McMoRan shares are owned by company insiders. Comparatively, 13.8% of Olympic Steel shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

About Freeport-McMoRan

Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. It primarily explores for copper, gold, molybdenum, silver, and other metals. The company's assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Chino and Tyrone in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile. The company was formerly known as Freeport-McMoRan Copper & Gold Inc. and changed its name to Freeport-McMoRan Inc. in July 2014. Freeport-McMoRan Inc. was incorporated in 1987 and is headquartered in Phoenix, Arizona.

About Olympic Steel

Olympic Steel, Inc. processes, distributes, and stores metal products primarily in the United States, Canada, and Mexico. It operates in three segments: Carbon Flat Products; Specialty Metals Flat Products; and Tubular and Pipe Products. The company offers stainless steel and aluminum coil and sheet products, angles, rounds, and flat bars; alloy, heat treated, and abrasion resistant coils, sheets and plates; coated metals, including galvanized, galvannealed, electro galvanized, advanced high strength steels, aluminized, and automotive grades of steel; commercial quality, advanced high strength steel, drawing steel, and automotive grades cold rolled steel coil and sheet products; hot rolled carbon comprising hot rolled coil, pickled and oiled sheet and plate steel products, automotive grades, advanced high strength steels, and high strength low alloys; tube, pipe, and bar products, including round, square, and rectangular mechanical and structural tubing; hydraulic and stainless tubing; boiler tubing; carbon, stainless, and aluminum pipes; valves and fittings; and tin mill products, such as electrolytic tinplate, electrolytic chromium coated steel, and black plates. The company also provides cutting-to-length, slitting, shearing, blanking, tempering, stretcher-leveling, plate and laser processing, forming and machining, tube processing, finishing, and fabrication services, as well as value-added services, such as saw cutting, laser cutting, beveling, threading, and grooving services. It serves metal consuming industries, such as manufacturers and fabricators of transportation and material handling lift equipment, construction, mining and farm equipment, agriculture equipment, storage tanks, environmental and energy generation equipment, automobiles, food service, and electrical equipment, as well as general and plate fabricators, and metals service centers through direct sales force. Olympic Steel, Inc. was founded in 1954 and is based in Highland Hills, Ohio.