Schnitzer Steel Industries (NASDAQ:SCHN) and United States Steel (NYSE:X) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.
Risk and Volatility
Schnitzer Steel Industries has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, United States Steel has a beta of 2.39, suggesting that its stock price is 139% more volatile than the S&P 500.
Dividends
Schnitzer Steel Industries pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. United States Steel pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. Schnitzer Steel Industries pays out 174.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United States Steel pays out 44.4% of its earnings in the form of a dividend. Schnitzer Steel Industries has raised its dividend for 1 consecutive years and United States Steel has raised its dividend for 1 consecutive years.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Schnitzer Steel Industries and United States Steel, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Schnitzer Steel Industries | 0 | 0 | 1 | 0 | 3.00 |
| United States Steel | 2 | 7 | 2 | 0 | 2.00 |
Schnitzer Steel Industries currently has a consensus target price of $35.00, indicating a potential upside of 1.33%. United States Steel has a consensus target price of $9.8571, indicating a potential downside of 40.66%. Given Schnitzer Steel Industries' stronger consensus rating and higher possible upside, research analysts plainly believe Schnitzer Steel Industries is more favorable than United States Steel.
Valuation and Earnings
This table compares Schnitzer Steel Industries and United States Steel's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Schnitzer Steel Industries | $1.71 billion | 0.55 | $-4,140,000.00 | $0.43 | 80.33 |
| United States Steel | $12.94 billion | 0.34 | $-630,000,000.00 | $0.09 | 184.56 |
Schnitzer Steel Industries has higher earnings, but lower revenue than United States Steel. Schnitzer Steel Industries is trading at a lower price-to-earnings ratio than United States Steel, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Schnitzer Steel Industries and United States Steel's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Schnitzer Steel Industries | 0.94% | 4.83% | 2.54% |
| United States Steel | -16.25% | -18.78% | -6.21% |
Insider & Institutional Ownership
80.9% of Schnitzer Steel Industries shares are owned by institutional investors. Comparatively, 60.4% of United States Steel shares are owned by institutional investors. 5.7% of Schnitzer Steel Industries shares are owned by company insiders. Comparatively, 1.7% of United States Steel shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Summary
Schnitzer Steel Industries beats United States Steel on 12 of the 16 factors compared between the two stocks.
