Contrasting Nucor (NYSE:NUE) and JFE (OTCMKTS:JFEEF)

JFE (OTCMKTS:JFEEF) and Nucor (NYSE:NUE) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Analyst Ratings

This is a breakdown of current ratings and price targets for JFE and Nucor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JFE	0	0	0	0	0.00
Nucor	0	2	8	0	2.80

Nucor has a consensus target price of $159.20, indicating a potential upside of 4.86%. Given Nucor’s stronger consensus rating and higher possible upside, analysts clearly believe Nucor is more favorable than JFE.

Earnings & Valuation

This table compares JFE and Nucor”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JFE	$31.91 billion	0.24	$606.33 million	$0.71	16.96
Nucor	$30.73 billion	1.13	$2.03 billion	$5.54	27.41

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

Profitability

This table compares JFE and Nucor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JFE	1.49%	2.76%	1.25%
Nucor	5.18%	7.85%	4.89%

Volatility & Risk

JFE has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Nucor has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500.

Insider & Institutional Ownership

76.5% of Nucor shares are owned by institutional investors. 0.7% of Nucor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Nucor beats JFE on 13 of the 14 factors compared between the two stocks.

About JFE

JFE Holdings, Inc., through its subsidiaries, engages in steel, engineering, and trading businesses in Japan and internationally. Its Steel segment produces and sells various steel products, processed steel products, and raw materials, as well as operates in the transportation, facility maintenance, and construction businesses. The company's Engineering segment handles the engineering of energy, urban environment, steel structures and industrial machinery, recycling, and electricity retailing projects. Its Trading segment purchases, processes, and distributes steel products, raw materials for steel production, nonferrous metal products, food, etc. JFE Holdings, Inc. was incorporated in 2002 and is headquartered in Tokyo, Japan.

About Nucor

Nucor Corporation engages in manufacture and sale of steel and steel products. It operates in three segments: steel mills, steel products, and raw materials. The Steel Mills segment produces hot-rolled, cold-rolled, and galvanized sheet steel products; plate steel products; wide-flange beams, beam blanks, and H-piling and sheet piling structural steel products; bar steel products, such as blooms, billets, concrete reinforcing and merchant bars, and engineered special bar quality products; and engages in the steel trading and rebar distribution businesses. This segment sells its products to steel service centers, fabricators, and manufacturers in the United States, Canada, and Mexico. The Steel Products segment offers steel joists and joist girders, steel decks, and galvanized torque tubes for used in solar arrays, hollow structural section steel tubing, electrical conduit, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, steel grating and expanded metal, wire and wire mesh, metal building systems, insulated metal panels, steel racking, overhead doors, and utility towers and structures for communications and energy transmission. This segment is also involved in the piling distribution business. The Raw Materials segment produces direct reduced iron (DRI); brokers ferrous and nonferrous metals, pig iron, hot briquetted iron, and DRI; supplies ferro-alloys; processes ferrous and nonferrous scrap metal; and engages in the natural gas production and industrial gas business. This segment sells its ferrous scrap to electric arc furnace steel mills and foundries for manufacturing process; and nonferrous scrap metal to aluminum can producers, secondary aluminum smelters, steel mills and other processors, and consumers of various nonferrous metals. It markets its products through in-house sales force; and internal distribution and trading companies. Nucor Corporation was founded in 1905 and is headquartered in Charlotte, North Carolina.