Nucor Corporation (NYSE: NUE) and Northwest Pipe (NASDAQ:NWPX) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitabiliy, valuation, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings and target prices for Nucor Corporation and Northwest Pipe, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nucor Corporation 0 4 11 0 2.73
Northwest Pipe 0 1 0 0 2.00

Nucor Corporation presently has a consensus price target of $68.75, suggesting a potential upside of 14.74%. Northwest Pipe has a consensus price target of $9.00, suggesting a potential downside of 42.64%. Given Nucor Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe Nucor Corporation is more favorable than Northwest Pipe.

Dividends

Nucor Corporation pays an annual dividend of $1.51 per share and has a dividend yield of 2.5%. Northwest Pipe does not pay a dividend. Nucor Corporation pays out 47.5% of its earnings in the form of a dividend. Northwest Pipe has increased its dividend for 43 consecutive years.

Volatility & Risk

Nucor Corporation has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500. Comparatively, Northwest Pipe has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Institutional and Insider Ownership

76.5% of Nucor Corporation shares are owned by institutional investors. Comparatively, 78.5% of Northwest Pipe shares are owned by institutional investors. 0.7% of Nucor Corporation shares are owned by insiders. Comparatively, 2.0% of Northwest Pipe shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Nucor Corporation and Northwest Pipe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nucor Corporation 5.90% 12.63% 6.76%
Northwest Pipe -2.34% -3.95% -3.39%

Earnings and Valuation

This table compares Nucor Corporation and Northwest Pipe’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nucor Corporation $17.31 billion 1.10 $2.54 billion $3.18 18.84
Northwest Pipe $151.99 million 0.99 -$5.45 million ($0.37) -42.41

Nucor Corporation has higher revenue and earnings than Northwest Pipe. Northwest Pipe is trading at a lower price-to-earnings ratio than Nucor Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Nucor Corporation beats Northwest Pipe on 12 of the 16 factors compared between the two stocks.

About Nucor Corporation

Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

About Northwest Pipe

Northwest Pipe Company is a manufacturer of engineered steel pipe water systems. The Company operates through two segments. The Water Transmission segment produces steel pipeline systems for use in drinking water infrastructure, and has approximately eight manufacturing facilities, located in Portland, Oregon; Denver, Colorado; Adelanto, California; Parkersburg, West Virginia; Saginaw, Texas; St. Louis, Missouri; Salt Lake City, Utah, and Monterrey, Mexico. The Tubular Products segment produces steel line pipe products for energy applications, and has a manufacturing facility located in Atchison, Kansas. The Company, through Water Transmission Group, produces engineered welded steel pipe products for use in water transmission applications. It also manufactures smaller diameter electric resistance welded (ERW) steel pipe through its Tubular Products Group. The Company’s solutions-based products are used in water transmission, plant piping, tunnels and river crossings applications.

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