AK Steel Holding Corporation (NYSE: AKS) and Haynes International (NASDAQ:HAYN) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitabiliy, valuation and analyst recommendations.

Institutional and Insider Ownership

76.7% of AK Steel Holding Corporation shares are held by institutional investors. Comparatively, 99.0% of Haynes International shares are held by institutional investors. 1.8% of AK Steel Holding Corporation shares are held by company insiders. Comparatively, 4.4% of Haynes International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for AK Steel Holding Corporation and Haynes International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AK Steel Holding Corporation 1 6 7 0 2.43
Haynes International 0 2 1 0 2.33

AK Steel Holding Corporation currently has a consensus price target of $8.05, indicating a potential upside of 20.99%. Haynes International has a consensus price target of $41.67, indicating a potential upside of 16.06%. Given AK Steel Holding Corporation’s stronger consensus rating and higher probable upside, research analysts clearly believe AK Steel Holding Corporation is more favorable than Haynes International.

Profitability

This table compares AK Steel Holding Corporation and Haynes International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AK Steel Holding Corporation 1.16% -235.11% 5.15%
Haynes International 0.84% 0.31% 0.15%

Dividends

Haynes International pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. AK Steel Holding Corporation does not pay a dividend. Haynes International pays out 338.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

AK Steel Holding Corporation has a beta of 2.81, indicating that its share price is 181% more volatile than the S&P 500. Comparatively, Haynes International has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.

Valuation & Earnings

This table compares AK Steel Holding Corporation and Haynes International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AK Steel Holding Corporation $5.90 billion 0.35 $670.60 million $0.26 25.58
Haynes International $405.25 million 1.10 $23.76 million $0.26 138.08

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

Summary

AK Steel Holding Corporation beats Haynes International on 9 of the 15 factors compared between the two stocks.

AK Steel Holding Corporation Company Profile

AK Steel Holding Corporation is a producer of flat-rolled carbon, stainless and electrical steels, and tubular products through its subsidiary, AK Steel Corporation (AK Steel). The Company also operates blast furnaces and electric arc furnaces. As of December 31, 2016, its operations included eight steelmaking and finishing plants, two coke plants and two tube manufacturing plants across states, including Indiana, Kentucky, Michigan, Ohio, Pennsylvania and West Virginia, and a tube manufacturing plant in Mexico. These operations produce flat-rolled carbon, specialty stainless and electrical steels that it sells in sheet and strip form, and carbon and stainless steel that it finishes into welded steel tubing. It also produces metallurgical coal through its subsidiary, AK Coal Resources, Inc. In addition, the Company operates trading companies in Mexico and Europe that buy and sell steel and steel products and other materials.

Haynes International Company Profile

Haynes International, Inc. (Haynes) is a producer of nickel- and cobalt-based alloys in flat product forms, such as sheet, coil and plate forms. The Company also produces its products as seamless and welded tubulars, and in slab, bar, billet and wire forms. It focuses on developing, manufacturing, marketing and distributing alloys, which are sold in the aerospace, chemical processing and industrial gas turbine industries. Its products consist of high-temperature resistant alloys (HTA) products and corrosion-resistant alloys (CRA) products. Its HTA products are used in manufacturing components for the hot sections of gas turbine engines. Its CRA products are used in a range of applications, such as chemical processing, power plant emissions control, hazardous waste treatment, sour gas production and pharmaceutical vessels. The Company has a four-high Steckel rolling mill used in hot rolling high-performance alloys. The Company has operations in the United States, Europe and China.

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