Carpenter Technology Corporation (NYSE: CRS) and SunCoke Energy Partners, L.P. (NYSE:SXCP) 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, profitabiliy, valuation, institutional ownership, dividends, risk and earnings.

Earnings & Valuation

This table compares Carpenter Technology Corporation and SunCoke Energy Partners, L.P.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carpenter Technology Corporation $1.80 billion 1.05 $218.20 million $1.00 40.03
SunCoke Energy Partners, L.P. $800.00 million 1.05 $218.50 million ($1.87) -9.76

SunCoke Energy Partners, L.P. has higher revenue, but lower earnings than Carpenter Technology Corporation. SunCoke Energy Partners, L.P. is trading at a lower price-to-earnings ratio than Carpenter Technology Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Carpenter Technology Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.8%. SunCoke Energy Partners, L.P. pays an annual dividend of $2.38 per share and has a dividend yield of 13.0%. Carpenter Technology Corporation pays out 72.0% of its earnings in the form of a dividend. SunCoke Energy Partners, L.P. pays out -127.3% 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. SunCoke Energy Partners, L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current recommendations for Carpenter Technology Corporation and SunCoke Energy Partners, L.P., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carpenter Technology Corporation 0 2 3 0 2.60
SunCoke Energy Partners, L.P. 0 0 1 0 3.00

Carpenter Technology Corporation presently has a consensus price target of $43.40, suggesting a potential upside of 8.42%. SunCoke Energy Partners, L.P. has a consensus price target of $19.00, suggesting a potential upside of 4.11%. Given Carpenter Technology Corporation’s higher probable upside, research analysts plainly believe Carpenter Technology Corporation is more favorable than SunCoke Energy Partners, L.P..

Volatility and Risk

Carpenter Technology Corporation has a beta of 2.08, suggesting that its stock price is 108% more volatile than the S&P 500. Comparatively, SunCoke Energy Partners, L.P. has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Profitability

This table compares Carpenter Technology Corporation and SunCoke Energy Partners, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carpenter Technology Corporation 2.61% 4.48% 1.83%
SunCoke Energy Partners, L.P. -9.52% 14.02% 5.44%

Institutional and Insider Ownership

95.0% of Carpenter Technology Corporation shares are held by institutional investors. Comparatively, 28.1% of SunCoke Energy Partners, L.P. shares are held by institutional investors. 3.6% of Carpenter Technology Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Carpenter Technology Corporation beats SunCoke Energy Partners, L.P. on 9 of the 16 factors compared between the two stocks.

About Carpenter Technology Corporation

Carpenter Technology Corporation is engaged in the manufacturing, fabrication and distribution of specialty metals. The Company’s segments include Specialty Alloys Operations (SAO) and Performance Engineered Products (PEP). Its SAO segment consists of alloy and stainless steel manufacturing operations. Its PEP segment includes the Dynamet titanium business, the Carpenter Powder Products business, the Amega West business, the Specialty Steel Supply business and the Latrobe and Mexico distribution businesses. It develops, manufactures and distributes cast/wrought and powder metal stainless steels, and special alloys, including high temperature (iron-nickel-cobalt base), stainless, corrosion resistant, controlled expansion alloys, ultra-high strength and implantable alloys, tool and die steels and other specialty metals, as well as cast/wrought titanium alloys. The Company manufactures and rents down-hole drilling tools and components used in the oil and gas industry.

About SunCoke Energy Partners, L.P.

SunCoke Energy Partners, L.P. is engaged in the production of coke used in the blast furnace production of steel. As of December 31, 2016, the Company owned a 98% interest in Haverhill Coke Company LLC (Haverhill), Middletown Coke Company, LLC (Middletown), and Gateway Energy and Coke Company, LLC (Granite City). The Company’s segments include Domestic Coke, which consists of the Haverhill, Middletown and Granite City cokemaking and heat recovery operations located in Franklin Furnace, Ohio; Middletown, Ohio, and Granite City, Illinois, respectively, and Coal Logistics, which consists of the Company’s Convent Marine Terminal, Kanawha River Terminals, LLC and SunCoke Lake Terminal, LLC (Lake Terminal) coal handling and/or mixing service operations in Convent, Louisiana; Ceredo and Belle, West Virginia, and East Chicago, Indiana, respectively. It also provides coal handling and/or mixing services at its Coal Logistics terminals to steel, coke, electric utility and coal mining customers.

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