Critical Comparison: Schnitzer Steel Industries (SCHN) & Worthington Industries (WOR)
Schnitzer Steel Industries (NASDAQ: SCHN) and Worthington Industries (NYSE:WOR) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.
This is a breakdown of current ratings and price targets for Schnitzer Steel Industries and Worthington Industries, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Schnitzer Steel Industries||0||1||0||0||2.00|
Worthington Industries has a consensus target price of $46.50, indicating a potential downside of 6.91%. Given Worthington Industries’ higher probable upside, analysts clearly believe Worthington Industries is more favorable than Schnitzer Steel Industries.
Earnings & Valuation
This table compares Schnitzer Steel Industries and Worthington Industries’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Schnitzer Steel Industries||$1.58 billion||0.48||$90.43 million||$1.53||17.96|
|Worthington Industries||$3.01 billion||1.05||$306.33 million||$3.16||15.81|
Worthington Industries has higher revenue and earnings than Schnitzer Steel Industries. Worthington Industries is trading at a lower price-to-earnings ratio than Schnitzer Steel Industries, indicating that it is currently the more affordable of the two stocks.
Schnitzer Steel Industries pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Worthington Industries pays an annual dividend of $0.80 per share and has a dividend yield of 1.6%. Schnitzer Steel Industries pays out 49.0% of its earnings in the form of a dividend. Worthington Industries pays out 25.3% 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. Schnitzer Steel Industries has increased its dividend for 6 consecutive years. Schnitzer Steel Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
82.4% of Schnitzer Steel Industries shares are owned by institutional investors. Comparatively, 52.0% of Worthington Industries shares are owned by institutional investors. 3.8% of Schnitzer Steel Industries shares are owned by insiders. Comparatively, 31.3% of Worthington Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Schnitzer Steel Industries and Worthington Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Schnitzer Steel Industries||2.68%||8.34%||4.65%|
Risk & Volatility
Schnitzer Steel Industries has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Worthington Industries has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.
Worthington Industries beats Schnitzer Steel Industries on 10 of the 15 factors compared between the two stocks.
About Schnitzer Steel Industries
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.
About Worthington Industries
Worthington Industries, Inc. is a metals manufacturing company, focused on value-added steel processing and manufactured metal products. The Company’s segments include Steel Processing, Pressure Cylinders, Engineered Cabs and Other. The Steel Processing segment buys coils of steel from integrated steel mills and mini-mills, and also toll processes steel for steel mills, end users, service centers and other processors. The Pressure Cylinders segment manufactures and sells filled and unfilled pressure cylinders, tanks, hand torches, and oil and gas equipment along with various accessories and related products for end use market applications. The Engineered Cabs is a non-captive designer and manufacturer of custom-engineered open and enclosed cabs and operator stations and custom fabrications for heavy mobile equipment used in the agricultural, construction, forestry, mining and military industries. The Other segment includes Construction Services and Worthington Energy Innovations.
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