Commercial Metals (NYSE: CMC) and SunCoke Energy Partners (NYSE:SXCP) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.
Institutional & Insider Ownership
88.6% of Commercial Metals shares are owned by institutional investors. Comparatively, 13.3% of SunCoke Energy Partners shares are owned by institutional investors. 1.5% of Commercial Metals shares are owned by 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.
This is a summary of current ratings and price targets for Commercial Metals and SunCoke Energy Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SunCoke Energy Partners||0||0||1||0||3.00|
Commercial Metals presently has a consensus price target of $21.57, indicating a potential upside of 1.18%. Given Commercial Metals’ higher possible upside, analysts clearly believe Commercial Metals is more favorable than SunCoke Energy Partners.
Commercial Metals pays an annual dividend of $0.48 per share and has a dividend yield of 2.3%. SunCoke Energy Partners pays an annual dividend of $2.38 per share and has a dividend yield of 13.6%. Commercial Metals pays out 120.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SunCoke Energy Partners pays out -129.3% of its earnings in the form of a dividend. SunCoke Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Commercial Metals and SunCoke Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SunCoke Energy Partners||-9.04%||15.35%||5.55%|
Risk & Volatility
Commercial Metals has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, SunCoke Energy Partners has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.
Valuation & Earnings
This table compares Commercial Metals and SunCoke Energy Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Commercial Metals||$4.57 billion||0.54||$46.33 million||$0.40||53.30|
|SunCoke Energy Partners||$779.70 million||1.03||$119.10 million||($1.84)||-9.48|
SunCoke Energy Partners has lower revenue, but higher earnings than Commercial Metals. SunCoke Energy Partners is trading at a lower price-to-earnings ratio than Commercial Metals, indicating that it is currently the more affordable of the two stocks.
Commercial Metals Company Profile
Commercial Metals Company, together with its subsidiaries, manufactures, recycles and markets steel and metal products, related materials and services through a network. The Company’s Americas Recycling segment processes scrap metals for use as a raw material by manufacturers of new metal products. The Americas Mills segment consists of steel mills, commonly referred to as minimills that produce reinforcing bar (rebar), angles, flats and rounds. Its Americas Fabrication segment consists of its steel fabrication facilities that bend, weld, cut and fabricate steel, primarily rebar. Its International Mill segment consists of its mill, recycling and fabrication operations located in Poland. Its International Marketing and Distribution segment includes international operations for the sales, distribution and processing of primary and secondary metals, fabricated metals, semi-finished, long and flat steel products, and other industrial products.
SunCoke Energy Partners Company Profile
SunCoke Energy Partners, L.P. is engaged in the production of coke used in the blast furnace production of steel. As of December 31, 2016, the Company owned a 98% interest in Haverhill Coke Company LLC (Haverhill), Middletown Coke Company, LLC (Middletown), and Gateway Energy and Coke Company, LLC (Granite City). The Company’s segments include Domestic Coke, which consists of the Haverhill, Middletown and Granite City cokemaking and heat recovery operations located in Franklin Furnace, Ohio; Middletown, Ohio, and Granite City, Illinois, respectively, and Coal Logistics, which consists of the Company’s Convent Marine Terminal, Kanawha River Terminals, LLC and SunCoke Lake Terminal, LLC (Lake Terminal) coal handling and/or mixing service operations in Convent, Louisiana; Ceredo and Belle, West Virginia, and East Chicago, Indiana, respectively. It also provides coal handling and/or mixing services at its Coal Logistics terminals to steel, coke, electric utility and coal mining customers.
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