Olympic Steel (NASDAQ:ZEUS – Get Free Report) and Nippon Steel & Sumitomo Metal (OTCMKTS:NPSCY – Get Free Report) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.
Institutional and Insider Ownership
87.1% of Olympic Steel shares are owned by institutional investors. 13.8% of Olympic Steel shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Olympic Steel and Nippon Steel & Sumitomo Metal”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Olympic Steel | $1.94 billion | 0.19 | $22.98 million | $1.22 | 26.74 |
| Nippon Steel & Sumitomo Metal | $57.10 billion | 0.39 | $2.31 billion | ($0.03) | -229.00 |
Nippon Steel & Sumitomo Metal has higher revenue and earnings than Olympic Steel. Nippon Steel & Sumitomo Metal is trading at a lower price-to-earnings ratio than Olympic Steel, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Olympic Steel has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500. Comparatively, Nippon Steel & Sumitomo Metal has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.
Profitability
This table compares Olympic Steel and Nippon Steel & Sumitomo Metal’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Olympic Steel | 0.77% | 1.95% | 1.07% |
| Nippon Steel & Sumitomo Metal | -0.42% | -0.61% | -0.30% |
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Olympic Steel and Nippon Steel & Sumitomo Metal, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Olympic Steel | 0 | 0 | 1 | 0 | 3.00 |
| Nippon Steel & Sumitomo Metal | 0 | 0 | 0 | 0 | 0.00 |
Olympic Steel currently has a consensus target price of $38.00, indicating a potential upside of 16.49%. Given Olympic Steel’s stronger consensus rating and higher possible upside, research analysts plainly believe Olympic Steel is more favorable than Nippon Steel & Sumitomo Metal.
Dividends
Olympic Steel pays an annual dividend of $0.64 per share and has a dividend yield of 2.0%. Nippon Steel & Sumitomo Metal pays an annual dividend of $0.25 per share and has a dividend yield of 3.6%. Olympic Steel pays out 52.5% of its earnings in the form of a dividend. Nippon Steel & Sumitomo Metal pays out -833.3% 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. Olympic Steel has raised its dividend for 4 consecutive years. Nippon Steel & Sumitomo Metal is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Olympic Steel beats Nippon Steel & Sumitomo Metal on 12 of the 17 factors compared between the two stocks.
About Olympic Steel
Olympic Steel, Inc. processes, distributes, and stores metal products primarily in the United States, Canada, and Mexico. It operates in three segments: Carbon Flat Products; Specialty Metals Flat Products; and Tubular and Pipe Products. The company offers stainless steel and aluminum coil and sheet products, angles, rounds, and flat bars; alloy, heat treated, and abrasion resistant coils, sheets and plates; coated metals, including galvanized, galvannealed, electro galvanized, advanced high strength steels, aluminized, and automotive grades of steel; commercial quality, advanced high strength steel, drawing steel, and automotive grades cold rolled steel coil and sheet products; hot rolled carbon comprising hot rolled coil, pickled and oiled sheet and plate steel products, automotive grades, advanced high strength steels, and high strength low alloys; tube, pipe, and bar products, including round, square, and rectangular mechanical and structural tubing; hydraulic and stainless tubing; boiler tubing; carbon, stainless, and aluminum pipes; valves and fittings; and tin mill products, such as electrolytic tinplate, electrolytic chromium coated steel, and black plates. The company also provides cutting-to-length, slitting, shearing, blanking, tempering, stretcher-leveling, plate and laser processing, forming and machining, tube processing, finishing, and fabrication services, as well as value-added services, such as saw cutting, laser cutting, beveling, threading, and grooving services. It serves metal consuming industries, such as manufacturers and fabricators of transportation and material handling lift equipment, construction, mining and farm equipment, agriculture equipment, storage tanks, environmental and energy generation equipment, automobiles, food service, and electrical equipment, as well as general and plate fabricators, and metals service centers through direct sales force. Olympic Steel, Inc. was founded in 1954 and is based in Highland Hills, Ohio.
About Nippon Steel & Sumitomo Metal
Nippon Steel Corporation engages in steelmaking and steel fabrication, engineering and construction, chemicals and materials, and system solutions businesses in Japan and internationally. The company offers steel plates, sheets, and slags; bar and rod materials; structural steel; pipes and tubes; titanium and stainless products; and railway, automotive, and machinery parts for applications in automotive, energy, infrastructure, and consumer electronics markets. It is also involved in construction; waste processing and recycling; supplying electricity, gas, and heat; and the provision of coal-based chemical products, petrochemicals, electronic materials, materials and components for semiconductors and electronic parts, carbon fiber, and composite products. In addition, the company offers computer systems engineering and consulting, IT-enabled outsourcing, and other services. The company was formerly known as Nippon Steel & Sumitomo Metal Corporation and changed its name to Nippon Steel Corporation in April 2019. The company was incorporated in 1950 and is headquartered in Tokyo, Japan.
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