Financial Survey: Nippon Steel & Sumitomo Metal (OTCMKTS:NPSCY) versus Outokumpu (OTCMKTS:OUTKY)

Outokumpu (OTCMKTS:OUTKY) and Nippon Steel & Sumitomo Metal (OTCMKTS:NPSCY) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Profitability

This table compares Outokumpu and Nippon Steel & Sumitomo Metal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Outokumpu	-1.83%	-2.90%	-1.79%
Nippon Steel & Sumitomo Metal	-0.42%	-0.61%	-0.30%

Volatility & Risk

Outokumpu has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, Nippon Steel & Sumitomo Metal has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Dividends

Outokumpu pays an annual dividend of $0.05 per share and has a dividend yield of 1.8%. Nippon Steel & Sumitomo Metal pays an annual dividend of $0.09 per share and has a dividend yield of 2.1%. Outokumpu pays out -41.7% of its earnings in the form of a dividend. Nippon Steel & Sumitomo Metal pays out -450.0% 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. Nippon Steel & Sumitomo Metal is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Outokumpu and Nippon Steel & Sumitomo Metal”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outokumpu	$6.43 billion	0.41	-$43.28 million	($0.12)	-23.00
Nippon Steel & Sumitomo Metal	$57.10 billion	0.40	$2.31 billion	($0.02)	-213.50

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

Analyst Ratings

This is a summary of current recommendations for Outokumpu and Nippon Steel & Sumitomo Metal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Outokumpu	1	4	1	0	2.00
Nippon Steel & Sumitomo Metal	0	0	0	0	0.00

Summary

Nippon Steel & Sumitomo Metal beats Outokumpu on 9 of the 13 factors compared between the two stocks.

About Outokumpu

Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally. The company operates through three segments: Europe, Americas, and Ferrochrome. It offers cold rolled coils, strips, and sheets; hot rolled coils, strips, and plates; quarto plates; precision strips; and specialized components, such as welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, hardened and customized press plates, suction roll shells, and blancs and disks. The company also provides stainless steel powder which includes Supra 316L, Dura 17-4PH, Ultra 904L, Therma 253MA, Dura 4116, and Ni-free austenitic stainless steel powder; and nickel-based alloys. Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy; marine; and heavy industries. The company was founded in 1910 and is headquartered in Helsinki, Finland.

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.