Critical Analysis: Worthington Steel (NYSE:WS) versus Voestalpine (OTCMKTS:VLPNY)

Voestalpine (OTCMKTS:VLPNY) and Worthington Steel (NYSE:WS) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Earnings and Valuation

This table compares Voestalpine and Worthington Steel”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Voestalpine	$16.90 billion	0.28	$164.90 million	$0.20	28.00
Worthington Steel	$3.09 billion	0.53	$110.70 million	$2.18	14.79

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Voestalpine and Worthington Steel, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Voestalpine	0	2	0	0	2.00
Worthington Steel	0	0	1	0	3.00

Worthington Steel has a consensus price target of $34.00, suggesting a potential upside of 5.47%. Given Worthington Steel’s stronger consensus rating and higher possible upside, analysts plainly believe Worthington Steel is more favorable than Voestalpine.

Volatility & Risk

Voestalpine has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, Worthington Steel has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.

Institutional and Insider Ownership

45.4% of Worthington Steel shares are held by institutional investors. 2.2% of Worthington Steel shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Voestalpine and Worthington Steel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Voestalpine	0.99%	2.08%	0.99%
Worthington Steel	3.58%	9.43%	5.95%

Dividends

Voestalpine pays an annual dividend of $0.07 per share and has a dividend yield of 1.3%. Worthington Steel pays an annual dividend of $0.64 per share and has a dividend yield of 2.0%. Voestalpine pays out 35.0% of its earnings in the form of a dividend. Worthington Steel pays out 29.4% 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. Worthington Steel is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Worthington Steel beats Voestalpine on 13 of the 16 factors compared between the two stocks.

About Voestalpine

Voestalpine AG processes, develops, manufactures, and sells steel products in Austria, European Union, and internationally. The company operates through five segments: Steel, High Performance Metals, Metal Engineering, Metal Forming, and Other. The Steel division produces hot and cold-rolled steel strips, as well as electrogalvanized, hot-dip galvanized, and organically coated steel strips; and heavy plates for the energy sector, as well as turbine casings for automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The High Performance Metals segment offers special alloys for the oil and natural gas, aerospace, and energy engineering industries; tool manufacturing, component processing, heat treatment, and coating services; and warehousing and preprocessing of special steels, as well as services, including logistics, distribution, and processing for the oil and natural gas industries for automotive, white goods/consumer goods, building/construction, aerospace, mechanical engineering, and others. The Metal Engineering division offers rails and turnout products, rod and drawn wires, seamless tubes, and welding consumables and machinery; rails and digital monitoring systems; and services for rail infrastructure. This segment serves railway systems, automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The Metal Forming division manufactures special tubes and sections, and precision strip steel products, as well as pre-finished system components made from pressed, stamped, and roll-profiled parts for use in automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The company is headquartered in Linz, Austria.

About Worthington Steel

Worthington Steel, Inc. operates as a steel processor in North America. It offers carbon flat-rolled steel and tailor welded blanks, as well as electrical steel laminations; and aluminum tailor welded blanks. The company serves various end-markets, including automotive, heavy truck, agriculture, construction, and energy. Worthington Steel, Inc. was incorporated in 2023 and is based in Columbus, Ohio.