Critical Survey: Quanex (NX) & Global Brass and Copper (BRSS)

Quanex (NYSE: NX) and Global Brass and Copper (NYSE:BRSS) are both small-cap construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, profitability, risk, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Quanex and Global Brass and Copper, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quanex 0 2 1 0 2.33
Global Brass and Copper 0 0 0 0 N/A

Quanex currently has a consensus price target of $25.00, indicating a potential upside of 47.06%. Given Quanex’s higher possible upside, analysts plainly believe Quanex is more favorable than Global Brass and Copper.

Insider & Institutional Ownership

98.7% of Quanex shares are owned by institutional investors. Comparatively, 95.5% of Global Brass and Copper shares are owned by institutional investors. 5.6% of Quanex shares are owned by company insiders. Comparatively, 4.4% of Global Brass and Copper shares are owned 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.

Risk and Volatility

Quanex has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Global Brass and Copper has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Earnings and Valuation

This table compares Quanex and Global Brass and Copper’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Quanex $866.55 million 0.69 $18.68 million $0.77 22.08
Global Brass and Copper $1.56 billion 0.44 $50.90 million $2.78 11.17

Global Brass and Copper has higher revenue and earnings than Quanex. Global Brass and Copper is trading at a lower price-to-earnings ratio than Quanex, indicating that it is currently the more affordable of the two stocks.

Dividends

Quanex pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. Global Brass and Copper pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. Quanex pays out 20.8% of its earnings in the form of a dividend. Global Brass and Copper pays out 8.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares Quanex and Global Brass and Copper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quanex 3.17% 6.72% 3.45%
Global Brass and Copper 3.03% 44.43% 9.87%

Summary

Quanex beats Global Brass and Copper on 9 of the 15 factors compared between the two stocks.

About Quanex

Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry worldwide. It operates through three segments: North American Engineered Components, European Engineered Components, and North American Cabinet Components. The company offers flexible insulating glass spacers; extruded vinyl profiles; window and door screens; cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry; and precision-formed metal and wood products, as well as solar panel sealants, trim moldings, vinyl decking and fencing products, water retention barriers, and conservatory roof components. It sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents. The company is headquartered in Houston, Texas.

About Global Brass and Copper

Global Brass and Copper Holdings, Inc. converts, fabricates, processes, and distributes specialized non-ferrous products in the United States, the Asia Pacific, and Mexico. The company operates in three segments: Olin Brass, Chase Brass, and A.J. Oster. The Olin Brass segment manufactures, fabricates, and converts specialized copper and brass sheets, strips, foils, tubes, and fabricated products; and rerolls and forms other alloys, such as stainless steel, carbon steel, and aluminum. Its products are used in the building and housing, automotive, electronics/electrical components, munitions, and coinage markets. The Chase Brass segment manufactures and supplies brass rods in round, hexagonal, and other shapes for use in the building and housing, transportation, electronics/electrical components, and industrial machinery and equipment markets. The A.J. Oster segment processes and distributes primarily copper, brass, and aluminum sheets, strips, and coated products for use in the building and housing, automotive, and electronics/electrical components markets. The company sells its products under the Olin Brass, Chase Brass, A.J. Oster, Green Dot, and Eco Brass brands through its direct mill sales, distribution network, and third-party distributors. Global Brass and Copper Holdings, Inc. was founded in 2007 and is headquartered in Schaumburg, Illinois.

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