Contrasting Olympic Steel (ZEUS) & SunCoke Energy (SXC)

SunCoke Energy (NYSE: SXC) and Olympic Steel (NASDAQ:ZEUS) are both small-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current recommendations for SunCoke Energy and Olympic Steel, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SunCoke Energy 0 0 1 0 3.00
Olympic Steel 0 2 1 0 2.33

Olympic Steel has a consensus price target of $19.00, suggesting a potential downside of 22.23%. Given Olympic Steel’s higher probable upside, analysts clearly believe Olympic Steel is more favorable than SunCoke Energy.

Valuation and Earnings

This table compares SunCoke Energy and Olympic Steel’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SunCoke Energy $1.22 billion 0.66 $14.40 million $0.08 157.75
Olympic Steel $1.06 billion 0.25 -$1.07 million $1.11 22.01

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

Insider and Institutional Ownership

90.9% of SunCoke Energy shares are owned by institutional investors. Comparatively, 67.9% of Olympic Steel shares are owned by institutional investors. 3.9% of SunCoke Energy shares are owned by company insiders. Comparatively, 18.3% of Olympic Steel shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Olympic Steel pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. SunCoke Energy does not pay a dividend. Olympic Steel pays out 7.2% of its earnings in the form of a dividend.

Volatility & Risk

SunCoke Energy has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Olympic Steel has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500.

Profitability

This table compares SunCoke Energy and Olympic Steel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SunCoke Energy 0.42% 4.60% 1.21%
Olympic Steel 0.99% 4.32% 1.89%

Summary

SunCoke Energy beats Olympic Steel on 8 of the 15 factors compared between the two stocks.

SunCoke Energy Company Profile

SunCoke Energy, Inc. is a producer of coke in the Americas. The Company’s segments include Domestic Coke, Brazil Coke, Coal Logistics, and Corporate and Other. The Domestic Coke segment consists of its Jewell Coke Company, L.P. (Jewell), Indiana Harbor Coke Company (Indiana Harbor), Haverhill Coke Company LLC (Haverhill), Gateway Energy and Coke Company, LLC (Granite City) and Middletown Coke Company, LLC (Middletown) cokemaking and heat recovery operations. The Brazil Coke segment consists of its operations in Vitoria, Brazil, where the Company operate a cokemaking facility, ArcelorMittal Brasil S.A. The Coal Logistics segment consists of its Convent Marine Terminal (CMT), Kanawha River Terminals, LLC (KRT), SunCoke Lake Terminal, LLC (Lake Terminal) and Dismal River Terminal, LLC (DRT) coal handling and/or mixing service operations. It designs, develops, builds, owns and operates five cokemaking facilities in the United States, as of December 31, 2016.

Olympic Steel Company Profile

Olympic Steel, Inc. is a metals service center. The Company provides metals processing and distribution services for a range of customers. The Company operates through three segments: carbon flat products, specialty metals flat products, and tubular and pipe products. The Company’s carbon flat products segment’s focus is on the direct sale and distribution of large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. The Company’s specialty metals flat products segment’s focus is on the direct sale and distribution of processed aluminum and stainless flat-rolled sheet and coil products, flat bar products and fabricated parts. The Company’s tubular and pipe products segment consists of the Chicago Tube and Iron Company (CTI) business. Through its tubular and pipe products segment, it distributes metals tubing, pipe, bar, valve and fittings, and fabricate pressure parts supplied to various industrial markets.

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