Critical Contrast: ATI (NYSE:ATI) vs. Carpenter Technology (NYSE:CRS)

ATI (NYSE:ATI) and Carpenter Technology (NYSE:CRS) are both large-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Earnings & Valuation

This table compares ATI and Carpenter Technology”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATI	$4.36 billion	2.67	$367.80 million	$2.76	29.86
Carpenter Technology	$2.76 billion	4.57	$186.50 million	$7.06	35.86

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

Profitability

This table compares ATI and Carpenter Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ATI	8.93%	21.37%	7.66%
Carpenter Technology	12.26%	21.16%	10.85%

Insider & Institutional Ownership

92.0% of Carpenter Technology shares are owned by institutional investors. 1.1% of ATI shares are owned by company insiders. Comparatively, 2.9% of Carpenter Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

ATI has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Carpenter Technology has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for ATI and Carpenter Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATI	0	1	7	0	2.88
Carpenter Technology	0	1	5	0	2.83

ATI currently has a consensus target price of $78.29, suggesting a potential downside of 5.02%. Carpenter Technology has a consensus target price of $244.75, suggesting a potential downside of 3.33%. Given Carpenter Technology’s higher probable upside, analysts clearly believe Carpenter Technology is more favorable than ATI.

Summary

Carpenter Technology beats ATI on 9 of the 14 factors compared between the two stocks.

About ATI

ATI Inc. produces and sells specialty materials and complex components worldwide. It operates in two segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). The HPMC segment produces various materials, including titanium and titanium-based alloys, nickel- and cobalt-based alloys and superalloys, metallic powder alloys, advanced powder alloys and other specialty materials, in long product forms, such as ingot, billet, bar, rod, wire, shapes and rectangles, and seamless tubes, as well as precision forgings, components, and machined parts. The AA&S segment produces zirconium and related alloys, including hafnium and niobium, nickel-based alloys, titanium and titanium-based alloys, and specialty alloys in a variety of forms, such as plate, sheet, and precision rolled strip products. It also provides hot-rolling conversion services, including carbon steel products. ATI Inc. serves to aerospace and defense, energy, automotive, construction and mining, food equipment and appliances, and medical markets. The company was formerly known as Allegheny Technologies Incorporated. ATI Inc. was incorporated in 1996 and is headquartered in Dallas, Texas.

About Carpenter Technology

Carpenter Technology Corporation engages in the manufacture, fabrication, and distribution of specialty metals in the United States, Europe, the Asia Pacific, Mexico, Canada, and internationally. It operates in two segments, Specialty Alloys Operations and Performance Engineered Products. The company offers specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels, and tool steels, as well as additives, and metal powders and parts. It serves to aerospace, defense, medical, transportation, energy, industrial, and consumer markets. The company was founded in 1889 and is headquartered in Philadelphia, Pennsylvania.