Head to Head Analysis: Harsco (HSC) vs. HC2 (HCHC)

Harsco (NYSE: HSC) and HC2 (NYSE:HCHC) are both small-cap industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Profitability

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This table compares Harsco and HC2’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harsco 0.49% 30.82% 3.70%
HC2 -2.87% -39.02% -1.33%

Institutional & Insider Ownership

84.1% of Harsco shares are owned by institutional investors. Comparatively, 62.2% of HC2 shares are owned by institutional investors. 1.0% of Harsco shares are owned by insiders. Comparatively, 16.0% of HC2 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.

Earnings & Valuation

This table compares Harsco and HC2’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Harsco $1.61 billion 1.08 $7.82 million $0.74 29.26
HC2 $1.63 billion 0.14 -$46.91 million ($0.99) -5.30

Harsco has higher earnings, but lower revenue than HC2. HC2 is trading at a lower price-to-earnings ratio than Harsco, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Harsco has a beta of 2.63, meaning that its stock price is 163% more volatile than the S&P 500. Comparatively, HC2 has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Harsco and HC2, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harsco 0 0 5 0 3.00
HC2 0 0 1 0 3.00

Harsco currently has a consensus target price of $24.50, suggesting a potential upside of 13.16%. HC2 has a consensus target price of $11.50, suggesting a potential upside of 119.05%. Given HC2’s higher possible upside, analysts plainly believe HC2 is more favorable than Harsco.

Summary

Harsco beats HC2 on 10 of the 13 factors compared between the two stocks.

About Harsco

Harsco Corporation provides industrial services and engineered products worldwide. The company operates in three segments: Harsco Metals & Minerals, Harsco Industrial, and Harsco Rail. The Harsco Metals & Minerals segment provides on-site services of material logistics, product quality improvement, and resource recovery for iron, steel, and metals manufacturing; and value added environmental solutions for industrial co-products, as well as produces industrial abrasives and roofing granules. The Harsco Industrial segment manufactures and supplies custom-engineered and manufactured air-cooled heat exchangers for the natural gas, natural gas processing, and petrochemical industries; industrial grating products, such as metal bar grating configurations for industrial flooring, and safety and security applications in the energy, paper, chemical, refining, and processing industries. It also offers heat transfer products, such as boilers and water heaters for commercial and institutional applications; and high-security fencing products. The Harsco Rail segment designs and manufactures safety systems for transportation and industrial applications; and equipment, after-market parts, and services for the maintenance, repair, and construction of railway track. It serves private and government-owned railroads, and urban mass transit systems. Harsco Corporation was founded in 1853 and is headquartered in Camp Hill, Pennsylvania.

About HC2

HC2 Holdings, Inc. engages in construction, marine services, insurance, telecommunications, energy, life sciences, and other businesses in the United States, the United Kingdom, and internationally. The company fabricates and erects structural steel for commercial and industrial construction projects, such as buildings and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, and power plants. It also fabricates trusses and girders; and fabricates and erects water pipes, water storage tanks, pollution control scrubbers, tunnel liners, pressure vessels, strainers, filters, separators, and various customized products. In addition, the company provides subsea cable installation and maintenance services for the telecommunications sector; installation, maintenance, and repair services for fiber optic communication and power infrastructure to offshore platforms; and installation services for power cables for use in offshore wind farms and in the offshore wind market. Further, it distributes natural gas motor fuels; designs, builds, owns, acquires, operates, and maintains compressed natural gas fueling stations for transportation vehicles; and offers voice communication services for national telecommunications, mobile, prepaid, and voice over Internet protocol service operators, as well as wholesale carriers and Internet service providers. Additionally, the company provides long-term care, life, and annuity insurance products to individuals. Furthermore, it focuses on developing products to treat early osteoarthritis of the knee; develops skin lightening technology; owns licenses to create and distribute NASCAR video games; and offers analytics on broadcast TV, digital, and social media online platforms. The company was formerly known as PTGi Holding Inc. and changed its name to HC2 Holdings, Inc. in April 2014. HC2 Holdings, Inc. was founded in 1994 and is headquartered in New York, New York.

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