Gibraltar Industries (NASDAQ: ROCK) and Olympic Steel (NASDAQ:ZEUS) are both small-cap construction companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Risk & Volatility

Gibraltar Industries has a beta of 1.81, indicating that its stock price is 81% more volatile than the S&P 500. Comparatively, Olympic Steel has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Dividends

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

Profitability

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

Net Margins Return on Equity Return on Assets
Gibraltar Industries 2.38% 10.14% 5.09%
Olympic Steel 0.71% 2.82% 1.26%

Earnings & Valuation

This table compares Gibraltar Industries and Olympic Steel’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gibraltar Industries $958.80 million 0.94 $109.22 million $0.71 40.14
Olympic Steel $1.21 billion 0.17 $36.12 million $0.75 24.55

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

Analyst Ratings

This is a summary of recent ratings for Gibraltar Industries and Olympic Steel, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gibraltar Industries 0 0 2 0 3.00
Olympic Steel 0 1 2 0 2.67

Gibraltar Industries currently has a consensus price target of $34.50, suggesting a potential upside of 21.05%. Olympic Steel has a consensus price target of $22.33, suggesting a potential upside of 21.31%. Given Olympic Steel’s higher possible upside, analysts clearly believe Olympic Steel is more favorable than Gibraltar Industries.

Institutional and Insider Ownership

68.1% of Olympic Steel shares are owned by institutional investors. 0.5% of Gibraltar Industries shares are owned by company insiders. Comparatively, 18.3% of Olympic Steel shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Gibraltar Industries beats Olympic Steel on 8 of the 15 factors compared between the two stocks.

About Gibraltar Industries

Gibraltar Industries, Inc. is a manufacturer and distributor of building products for industrial, transportation infrastructure, residential housing, renewable energy and resource conservation markets. The Company’s segments include Residential Products; Industrial and Infrastructure Products, and Renewable Energy and Conservation. The Residential Products segment services residential housing construction and residential repair and remodeling activity with products including roof and foundation ventilation products, rain dispersion products and roof ventilation accessories. The Industrial and Infrastructure Products segment focuses on a range of markets, including industrial and commercial construction, automotive, airports and energy and power generation markets with products. The Renewable Energy and Conservation segment focuses on the design, engineering, manufacturing and installation of solar racking systems and commercial, institutional and retail greenhouse structures.

About Olympic Steel

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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