Reviewing Synalloy Corporation (SYNL) & Cliffs Natural Resources (CLF)
Synalloy Corporation (NASDAQ: SYNL) and Cliffs Natural Resources (NYSE:CLF) are both industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.
Insider & Institutional Ownership
47.6% of Synalloy Corporation shares are held by institutional investors. Comparatively, 58.3% of Cliffs Natural Resources shares are held by institutional investors. 10.6% of Synalloy Corporation shares are held by insiders. Comparatively, 0.5% of Cliffs Natural Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Synalloy Corporation and Cliffs Natural Resources’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Synalloy Corporation||$161.06 million||0.60||$7.35 million||($0.29)||-38.45|
|Cliffs Natural Resources||$2.34 billion||1.08||$480.50 million||$0.22||38.68|
Cliffs Natural Resources has higher revenue and earnings than Synalloy Corporation. Synalloy Corporation is trading at a lower price-to-earnings ratio than Cliffs Natural Resources, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Synalloy Corporation and Cliffs Natural Resources, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cliffs Natural Resources||3||2||3||0||2.00|
Cliffs Natural Resources has a consensus price target of $8.00, indicating a potential downside of 5.99%. Given Cliffs Natural Resources’ higher possible upside, analysts clearly believe Cliffs Natural Resources is more favorable than Synalloy Corporation.
This table compares Synalloy Corporation and Cliffs Natural Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cliffs Natural Resources||2.44%||-13.83%||7.41%|
Volatility and Risk
Synalloy Corporation has a beta of 0.14, indicating that its share price is 86% less volatile than the S&P 500. Comparatively, Cliffs Natural Resources has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500.
Cliffs Natural Resources beats Synalloy Corporation on 10 of the 13 factors compared between the two stocks.
Synalloy Corporation Company Profile
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.
Cliffs Natural Resources Company Profile
Cleveland-Cliffs Inc, formerly Cliffs Natural Resources Inc., is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. The Company is a producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel companies in the United States, Canada and Mexico. Its Asia Pacific Iron Ore operations are located in Western Australia and consist of its Koolyanobbing operation. The Koolyanobbing operations serve the Asian iron ore markets with direct-shipped fines and lump ore. In addition, the Company operates an iron ore mining complex in Western Australia. In the United States, the Company owned four operational iron ore mines and one indefinitely idled mine.
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