United States Steel Corporation (NYSE: X) and Synalloy Corporation (NASDAQ:SYNL) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Dividends

United States Steel Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Synalloy Corporation does not pay a dividend. United States Steel Corporation pays out 125.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares United States Steel Corporation and Synalloy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United States Steel Corporation 0.24% 6.50% 1.67%
Synalloy Corporation -1.54% 0.64% 0.38%

Analyst Ratings

This is a breakdown of recent recommendations for United States Steel Corporation and Synalloy Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United States Steel Corporation 3 6 8 0 2.29
Synalloy Corporation 0 0 0 0 N/A

United States Steel Corporation currently has a consensus target price of $27.91, indicating a potential upside of 11.22%. Given United States Steel Corporation’s higher possible upside, equities research analysts plainly believe United States Steel Corporation is more favorable than Synalloy Corporation.

Insider and Institutional Ownership

63.4% of United States Steel Corporation shares are held by institutional investors. Comparatively, 47.6% of Synalloy Corporation shares are held by institutional investors. 1.0% of United States Steel Corporation shares are held by insiders. Comparatively, 10.6% of Synalloy Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

United States Steel Corporation has a beta of 2.88, indicating that its stock price is 188% more volatile than the S&P 500. Comparatively, Synalloy Corporation has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500.

Valuation & Earnings

This table compares United States Steel Corporation and Synalloy Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
United States Steel Corporation $11.21 billion 0.39 $838.00 million $0.16 156.81
Synalloy Corporation $161.06 million 0.63 $7.35 million ($0.29) -40.00

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

Summary

United States Steel Corporation beats Synalloy Corporation on 11 of the 15 factors compared between the two stocks.

United States Steel Corporation Company Profile

United States Steel Corporation is an integrated steel producer. The Company is engaged in producing flat-rolled and tubular products with production operations in North America and Europe. The Company operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE) and Tubular Products (Tubular). The Flat-Rolled segment includes the operating results of its integrated steel plants and equity investees in the United States involved in the production of slabs, rounds, strip mill plates, sheets and tin mill products, as well as all iron ore and coke production facilities in the United States. The USSE segment includes the operating results of U. S. Steel Kosice (USSK) and its integrated steel plant and coke production facilities in Slovakia. The Tubular segment includes the operating results of its tubular production facilities, primarily in the United States and equity investees in the United States and Brazil.

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.

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