Haynes International (NASDAQ: HAYN) and Schnitzer Steel Industries (NASDAQ:SCHN) are both small-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitabiliy and risk.

Analyst Ratings

This is a summary of current ratings for Haynes International and Schnitzer Steel Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Haynes International 0 2 1 0 2.33
Schnitzer Steel Industries 0 1 0 0 2.00

Haynes International currently has a consensus price target of $41.67, indicating a potential upside of 15.39%. Given Haynes International’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Haynes International is more favorable than Schnitzer Steel Industries.

Risk & Volatility

Haynes International has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500. Comparatively, Schnitzer Steel Industries has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Dividends

Haynes International pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. Schnitzer Steel Industries pays an annual dividend of $0.75 per share and has a dividend yield of 3.0%. 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. Schnitzer Steel Industries pays out 49.0% of its earnings in the form of a dividend. Schnitzer Steel Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

99.0% of Haynes International shares are owned by institutional investors. Comparatively, 85.6% of Schnitzer Steel Industries shares are owned by institutional investors. 4.4% of Haynes International shares are owned by company insiders. Comparatively, 3.8% of Schnitzer Steel Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Haynes International and Schnitzer Steel Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Haynes International 0.84% 0.31% 0.15%
Schnitzer Steel Industries 3.64% 13.24% 7.57%

Valuation & Earnings

This table compares Haynes International and Schnitzer Steel Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Haynes International $405.25 million 1.10 $23.76 million $0.26 138.89
Schnitzer Steel Industries $1.58 billion 0.43 $90.43 million $1.53 16.14

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

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.

Schnitzer Steel Industries Company Profile

Schnitzer Steel Industries, Inc. is a recycler of ferrous and nonferrous scrap metal, including end-of-life vehicles, and a manufacturer of finished steel products. The Company operates through two segments: the Auto and Metals Recycling (AMR) business and the Steel Manufacturing Business (SMB). The AMR segment collects and recycles auto bodies, rail cars, home appliances, industrial machinery, manufacturing scrap and construction and demolition scrap from bridges, buildings and other infrastructure. AMR’s primary products include recycled ferrous and nonferrous scrap metal. The SMB segment produces finished steel products such as rebar, wire rod, coiled rebar, merchant bar and other specialty products using 100% recycled metal sourced from AMR. SMB’s products are primarily used in nonresidential and infrastructure construction in North America. SMB operates a steel mini-mill in McMinnville, Oregon that produces finished steel products using recycled metal and other raw materials.

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