Critical Contrast: Olympic Steel (NASDAQ:ZEUS) versus Acerinox (OTCMKTS:ANIOY)

Olympic Steel (NASDAQ:ZEUS) and Acerinox (OTCMKTS:ANIOY) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Olympic Steel and Acerinox, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Olympic Steel	1	0	1	0	2.00
Acerinox	0	1	3	0	2.75

Olympic Steel presently has a consensus price target of $38.00, suggesting a potential upside of 2.70%. Given Olympic Steel’s higher possible upside, research analysts clearly believe Olympic Steel is more favorable than Acerinox.

Dividends

Olympic Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.7%. Acerinox pays an annual dividend of $0.22 per share and has a dividend yield of 3.5%. Olympic Steel pays out 54.7% of its earnings in the form of a dividend. Acerinox pays out 115.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Olympic Steel has increased its dividend for 4 consecutive years.

Earnings & Valuation

This table compares Olympic Steel and Acerinox”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Olympic Steel	$1.90 billion	0.22	$22.98 million	$1.17	31.62
Acerinox	$5.86 billion	0.53	$243.41 million	$0.19	32.74

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

Profitability

This table compares Olympic Steel and Acerinox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Olympic Steel	0.73%	2.12%	1.15%
Acerinox	1.59%	3.54%	1.41%

Volatility & Risk

Olympic Steel has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500. Comparatively, Acerinox has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Institutional & Insider Ownership

87.1% of Olympic Steel shares are owned by institutional investors. 13.8% of Olympic Steel shares are owned by 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

Acerinox beats Olympic Steel on 10 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 Acerinox

Acerinox, S.A., together with its subsidiaries, manufactures, process, and markets stainless steel products in Spain, the United States, Africa, Asia, Rest of Europe, and internationally. It operates through Stainless steel, and High-performance Alloys segments. The company offers flat products, including hot and cold rolled coils and sheets, strips, flat bars, and discs, as well as engraved coil and sheet, black coil, slabs, circles, billets, and plates. It provides long products, which include wire and hexagonal wire rods, peeled bars, hot and cold reinforcement bars, black bars, profiles, angles, and steel profiles, as well as stainless steel, color coated, and reinforcement wires. In additions, it offers stainless steel products, such as austenitic, ferritic, duplex, and martensitic. Acerinox, S.A. was incorporated in 1970 and is headquartered in Madrid, Spain.