Analyzing Steel Dynamics (STLD) and Dynamic Materials Corp. (BOOM)
Dynamic Materials Corp. (NASDAQ: BOOM) and Steel Dynamics (NASDAQ:STLD) are both industrial products companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitabiliy, dividends, valuation, analyst recommendations, institutional ownership and risk.
Volatility and Risk
Dynamic Materials Corp. has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Steel Dynamics has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.
Dynamic Materials Corp. pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Steel Dynamics pays an annual dividend of $0.62 per share and has a dividend yield of 1.7%. Dynamic Materials Corp. pays out -12.7% of its earnings in the form of a dividend. Steel Dynamics pays out 29.2% 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.
This is a breakdown of current ratings and target prices for Dynamic Materials Corp. and Steel Dynamics, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Dynamic Materials Corp.||0||0||1||0||3.00|
Dynamic Materials Corp. presently has a consensus price target of $19.00, suggesting a potential upside of 39.71%. Steel Dynamics has a consensus price target of $39.07, suggesting a potential upside of 7.66%. Given Dynamic Materials Corp.’s stronger consensus rating and higher possible upside, research analysts clearly believe Dynamic Materials Corp. is more favorable than Steel Dynamics.
This table compares Dynamic Materials Corp. and Steel Dynamics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Dynamic Materials Corp.||-5.80%||-7.03%||-4.86%|
Earnings & Valuation
This table compares Dynamic Materials Corp. and Steel Dynamics’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Dynamic Materials Corp.||$157.01 million||1.28||$4.63 million||($0.63)||-21.59|
|Steel Dynamics||$8.40 billion||1.04||$1.36 billion||$2.12||17.12|
Steel Dynamics has higher revenue and earnings than Dynamic Materials Corp.. Dynamic Materials Corp. is trading at a lower price-to-earnings ratio than Steel Dynamics, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
85.0% of Dynamic Materials Corp. shares are owned by institutional investors. Comparatively, 83.6% of Steel Dynamics shares are owned by institutional investors. 3.2% of Dynamic Materials Corp. shares are owned by company insiders. Comparatively, 4.2% of Steel Dynamics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Steel Dynamics beats Dynamic Materials Corp. on 10 of the 15 factors compared between the two stocks.
About Dynamic Materials Corp.
DMC Global Inc., formerly Dynamic Materials Corporation, is a diversified technology company. The Company operates a family of technical product and process businesses serving the energy, industrial and infrastructure markets. The Company’s businesses operate through an international network of manufacturing, distribution and sales facilities. The Company’s segments are NobelClad and DynaEnergetics. The NobelClad segment is engaged in the production of explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints. The DynaEnergetics segment manufactures, markets and sells oilfield perforating equipment and explosives, including detonating cords, detonators, bi-directional boosters and shaped charges, and seismic related explosives and accessories. It owns explosive metalworking and metallic processes, and registered trademarks, including Detaclad, Detacouple, EFTEK, ETJ 2000 and NOBELCLAD.
About Steel Dynamics
Steel Dynamics, Inc. is a steel producing and a metal recycling company. The Company is engaged in the manufacture and sale of steel products, processing and sale of recycled ferrous and nonferrous metals, and fabrication and sale of steel joists and deck products. Its segments include steel operations, metals recycling operations, steel fabrication operations and Other Operations. It offers a range of steel products, such as sheet products, long products and steel finishing. The steel operations segment includes Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia and Iron Dynamics. The metals recycling operations segment consists of OmniSource Corporation. The fabrication operations produce steel building components. The Other Operations segment consists of subsidiary operations and smaller joint ventures.
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