Northwest Pipe (NASDAQ: NWPX) and Olympic Steel (NASDAQ:ZEUS) are both small-cap industrial products companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Dividends

Olympic Steel pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Northwest Pipe does not pay a dividend. Olympic Steel pays out 10.7% of its earnings in the form of a dividend.

Risk & Volatility

Northwest Pipe has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Olympic Steel has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Northwest Pipe and Olympic Steel, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Pipe 0 1 0 0 2.00
Olympic Steel 0 1 2 0 2.67

Northwest Pipe currently has a consensus price target of $9.00, indicating a potential downside of 50.77%. Olympic Steel has a consensus price target of $22.33, indicating a potential upside of 22.11%. Given Olympic Steel’s stronger consensus rating and higher probable upside, analysts plainly believe Olympic Steel is more favorable than Northwest Pipe.

Institutional & Insider Ownership

83.5% of Northwest Pipe shares are held by institutional investors. Comparatively, 68.1% of Olympic Steel shares are held by institutional investors. 2.0% of Northwest Pipe shares are held by insiders. Comparatively, 18.3% of Olympic Steel shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Northwest Pipe 0.45% -1.90% -1.65%
Olympic Steel 0.71% 2.82% 1.26%

Valuation & Earnings

This table compares Northwest Pipe and Olympic Steel’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Northwest Pipe $138.62 million 1.27 -$4.17 million $0.06 304.67
Olympic Steel $1.21 billion 0.17 $36.12 million $0.75 24.39

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

Summary

Olympic Steel beats Northwest Pipe on 12 of the 15 factors compared between the two stocks.

Northwest Pipe Company Profile

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.

Olympic Steel Company Profile

Olympic Steel, Inc. is a metals service center. The Company provides metals processing and distribution services for a range of customers. The Company operates through three segments: carbon flat products, specialty metals flat products, and tubular and pipe products. The Company’s carbon flat products segment’s focus is on the direct sale and distribution of large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. The Company’s specialty metals flat products segment’s focus is on the direct sale and distribution of processed aluminum and stainless flat-rolled sheet and coil products, flat bar products and fabricated parts. The Company’s tubular and pipe products segment consists of the Chicago Tube and Iron Company (CTI) business. Through its tubular and pipe products segment, it distributes metals tubing, pipe, bar, valve and fittings, and fabricate pressure parts supplied to various industrial markets.

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