TMS International (NYSE: TMS) and Vectrus (NYSE:VEC) are both small-cap industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and price targets for TMS International and Vectrus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TMS International 0 0 0 0 N/A
Vectrus 0 1 1 0 2.50

Vectrus has a consensus target price of $37.00, indicating a potential upside of 19.70%. Given Vectrus’ higher probable upside, analysts plainly believe Vectrus is more favorable than TMS International.

Earnings & Valuation

This table compares TMS International and Vectrus’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TMS International N/A N/A N/A $0.81 21.59
Vectrus $1.19 billion 0.29 $23.65 million $1.81 17.08

Vectrus has higher revenue and earnings than TMS International. Vectrus is trading at a lower price-to-earnings ratio than TMS International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TMS International and Vectrus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TMS International N/A N/A N/A
Vectrus 2.02% 17.25% 4.79%

Insider and Institutional Ownership

86.6% of Vectrus shares are owned by institutional investors. 3.9% of Vectrus shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Vectrus beats TMS International on 9 of the 10 factors compared between the two stocks.

About TMS International

TMS International Corp. (TMS), formerly Metal Services Acquisition Corp., is a provider of outsourced industrial services to steel mills in North America. The Company provides a range of services through two segments: Mill Services Group and Raw Material and Optimization Group. The Mill Services Group segment includes scrap management and preparation; semi-finished and finished material handling; metal recovery and slag handling, processing and sales, and surface conditioning. The Raw Material and Optimization Group segment include raw materials procurement and logistics, and software-based raw materials cost optimization. The Company is a holding company controlled by Onex, and it operates through its wholly-owned subsidiaries, including its primary operating company Tube City IMS, LLC. It operates at 74 customer sites in nine countries across North America, Europe and Latin America, and its global raw materials procurement network spans five continents.

About Vectrus

Vectrus, Inc. is a provider of services to the United States Government across the world. The Company offers services, including infrastructure asset management, logistics and supply chain management, and information technology and network communication. Its infrastructure asset management services support the United States Army, Air Force and Navy, and include infrastructure services, security, warehouse management and distribution, ammunition management, civil engineering, air base maintenance and operations, communications, emergency services, transportation, and life support activities at various global military installations. Its logistics and supply chain management services support and maintain the vehicle and equipment stocks of the United States Army and Marine Corps. Its information technology and network communication services consist of sustainment of communications systems, network security, systems installation and life cycle management of information technology systems.

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