Critical Analysis: Timken Steel Corporation (TMST) vs. Handy & Harman (HNH)
Timken Steel Corporation (NYSE: TMST) and Handy & Harman (NASDAQ:HNH) are both small-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.
This is a summary of current recommendations and price targets for Timken Steel Corporation and Handy & Harman, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Timken Steel Corporation||0||2||1||0||2.33|
|Handy & Harman||0||0||0||0||N/A|
Timken Steel Corporation presently has a consensus price target of $19.75, indicating a potential upside of 15.97%. Given Timken Steel Corporation’s higher possible upside, analysts plainly believe Timken Steel Corporation is more favorable than Handy & Harman.
Insider and Institutional Ownership
75.6% of Timken Steel Corporation shares are held by institutional investors. Comparatively, 88.2% of Handy & Harman shares are held by institutional investors. 8.1% of Timken Steel Corporation shares are held by insiders. Comparatively, 6.1% of Handy & Harman 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.
Valuation and Earnings
This table compares Timken Steel Corporation and Handy & Harman’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Timken Steel Corporation||$1.08 billion||0.70||-$29.80 million||($1.99)||-8.56|
|Handy & Harman||$957.45 million||0.41||$110.27 million||$0.71||45.00|
Handy & Harman has higher revenue, but lower earnings than Timken Steel Corporation. Timken Steel Corporation is trading at a lower price-to-earnings ratio than Handy & Harman, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Timken Steel Corporation has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500. Comparatively, Handy & Harman has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.
This table compares Timken Steel Corporation and Handy & Harman’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Timken Steel Corporation||-8.13%||-14.32%||-7.91%|
|Handy & Harman||0.91%||4.84%||1.01%|
Timken Steel Corporation Company Profile
TimkenSteel Corporation manufactures alloy steel, as well as carbon and micro-alloy steel. The Company’s portfolio includes special bar quality (SBQ) bars, seamless mechanical tubing and precision steel components. In addition, the Company supplies machining and thermal treatment services, as well as manage raw material recycling programs, which are used as a feeder system for its melt operations. The Company’s products include SBQ Steel and Seamless Mechanical Steel Tubing, and Value-added Precision Products and Services. Its focus is on alloy steel. The Company manufactures carbon, micro-alloy and alloy steel, sold as ingots, bars and tubes. In addition to its customized steels, the Company also manufactures custom-make precision components. Its products and services are used in a range of demanding applications in the market sectors, such as oil and gas, industrial equipment, mining and power generation.
Handy & Harman Company Profile
Handy & Harman Ltd. is a holding company. The Company, through its subsidiaries, is a diversified manufacturer of engineered industrial products. The Company’s segments include Joining Materials, Tubing, Building Materials, Performance Materials, Electrical Products, and Kasco Blades and Route Repair Services (Kasco). Joining Materials fabricates precious metals and their alloys into brazing alloys. Tubing manufactures a range of steel tubing products. Building Materials manufactures and supplies products to the commercial construction and building industries. Performance Materials manufactures sheet and mechanically formed glass manufactures sheet and mechanically formed glass, quartz, carbon and aramid materials. Electrical Products segment designs, manufactures and markets power electronics and power protection, among others. Kasco provides meat-room blade products, repair services and resale products for the meat and deli departments of supermarkets and restaurants, among others.
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