Critical Review: Synalloy (SYNL) versus ArcelorMittal (MT)
Synalloy (NASDAQ: SYNL) and ArcelorMittal (NYSE:MT) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitabiliy, analyst recommendations, dividends, earnings, risk and valuation.
This is a summary of recent ratings and recommmendations for Synalloy and ArcelorMittal, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ArcelorMittal has a consensus price target of $26.88, indicating a potential upside of 16.63%. Given ArcelorMittal’s higher probable upside, analysts clearly believe ArcelorMittal is more favorable than Synalloy.
Volatility & Risk
Synalloy has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500. Comparatively, ArcelorMittal has a beta of 2.06, suggesting that its stock price is 106% more volatile than the S&P 500.
Earnings & Valuation
This table compares Synalloy and ArcelorMittal’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Synalloy||$144.46 million||0.67||$3.34 million||($0.58)||-19.31|
|ArcelorMittal||$59.48 billion||0.40||$7.12 billion||$3.18||7.25|
ArcelorMittal has higher revenue and earnings than Synalloy. Synalloy is trading at a lower price-to-earnings ratio than ArcelorMittal, indicating that it is currently the more affordable of the two stocks.
This table compares Synalloy and ArcelorMittal’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
47.4% of Synalloy shares are held by institutional investors. Comparatively, 9.6% of ArcelorMittal shares are held by institutional investors. 10.6% of Synalloy shares are held by company insiders. Comparatively, 0.1% of ArcelorMittal shares are held 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.
ArcelorMittal beats Synalloy on 9 of the 12 factors compared between the two stocks.
Synalloy Corporation is a chemical manufacturing company. The Company operates through two segments: the Metals Segment and the Specialty Chemicals Segment. The Company’s Metals Segment comprises three subsidiaries: Synalloy Metals, Inc., which owns Bristol Metals, LLC (BRISMET), located in Bristol, Tennessee; Palmer of Texas Tanks, Inc. (Palmer), located in Andrews, Texas; and Specialty Pipe & Tube, Inc. (Specialty), located in Mineral Ridge, Ohio and Houston, Texas. The Company’s Metals Segment manufactures stainless steel, other alloy pipe, storage solutions and separation equipment. The Company’s Specialty Chemicals segment consists of the Company’s subsidiary, Manufacturers Soap and Chemical Company (MS&C). The Specialty Chemicals Segment manufactures lubricants, surfactants, reaction intermediaries, sulfated fats and oils, and chemical tolling manufacturing resources.
ArcelorMittal S.A. (ArcelorMittal) is a holding company. The Company, together with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia and Africa. ArcelorMittal operates through five segments, which include NAFTA; Europe; Brazil; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA segment produces flat, long and tubular products. The Brazil segment includes the flat operations of Brazil, and the long and tubular operations of Brazil and neighboring countries. The Europe segment is the flat steel producer in Europe. The ACIS segment produces a combination of flat, long products and tubular products. The Mining segment comprises all mines owned by ArcelorMittal in the Americas, Asia, Europe and Africa. It produces a range of finished and semi-finished steel products (semis).
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