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

Earnings & Valuation

This table compares Synalloy and National Steel’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Synalloy $138.57 million 0.82 -$7.09 million ($0.13) -99.62
National Steel $4.92 billion 0.67 -$244.57 million $0.25 9.68

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Synalloy and National Steel, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synalloy 0 0 0 0 N/A
National Steel 0 1 0 0 2.00

Dividends

Synalloy pays an annual dividend of $0.13 per share and has a dividend yield of 1.0%. National Steel does not pay a dividend. Synalloy pays out -100.0% of its earnings in the form of a dividend. Synalloy has raised its dividend for 2 consecutive years.

Volatility and Risk

Synalloy has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500. Comparatively, National Steel has a beta of 2.21, indicating that its stock price is 121% more volatile than the S&P 500.

Institutional and Insider Ownership

48.4% of Synalloy shares are held by institutional investors. Comparatively, 3.2% of National Steel shares are held by institutional investors. 10.6% of Synalloy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Synalloy -0.59% 1.85% 1.03%
National Steel -3.33% -7.52% -1.33%

Summary

Synalloy beats National Steel on 11 of the 14 factors compared between the two stocks.

About Synalloy

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.

About National Steel

Companhia Siderurgica Nacional is a Brazil-based company engaged in the steel industry. The Company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a range of steel products, including coated galvanized flat steel and tinplate. The Company operates in five segments: Steel, Mining, Cement, Logistics and Energy. The Steel segment focuses on the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel, with operations in Brazil, the United States, Portugal and Germany. The Mining segment encompasses the activities of iron ore and tin mining. The Cement segment is responsible for the cement production, distribution and sale operations. The Logistics segment manages port terminal for containers, as well as railway networks. The Energy segment includes generation of electric power. The Company is controlled by Vicunha Acos SA.

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