Critical Survey: Usinas Siderurgicas de Minas Gerais (OTCMKTS:USNZY) & L.B. Foster (NASDAQ:FSTR)

L.B. Foster (NASDAQ:FSTR) and Usinas Siderurgicas de Minas Gerais (OTCMKTS:USNZY) are both small-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings for L.B. Foster and Usinas Siderurgicas de Minas Gerais, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
L.B. Foster	0	3	1	0	2.25
Usinas Siderurgicas de Minas Gerais	0	1	0	0	2.00

L.B. Foster currently has a consensus target price of $25.00, suggesting a potential downside of 20.31%. Given L.B. Foster’s stronger consensus rating and higher probable upside, analysts clearly believe L.B. Foster is more favorable than Usinas Siderurgicas de Minas Gerais.

Institutional and Insider Ownership

80.6% of L.B. Foster shares are owned by institutional investors. 4.7% of L.B. Foster shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

L.B. Foster has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Usinas Siderurgicas de Minas Gerais has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Earnings & Valuation

This table compares L.B. Foster and Usinas Siderurgicas de Minas Gerais”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
L.B. Foster	$530.77 million	0.61	$42.95 million	$0.45	69.71
Usinas Siderurgicas de Minas Gerais	$4.80 billion	0.14	-$27.06 million	($0.49)	-2.51

L.B. Foster has higher earnings, but lower revenue than Usinas Siderurgicas de Minas Gerais. Usinas Siderurgicas de Minas Gerais is trading at a lower price-to-earnings ratio than L.B. Foster, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares L.B. Foster and Usinas Siderurgicas de Minas Gerais’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
L.B. Foster	0.96%	2.79%	1.44%
Usinas Siderurgicas de Minas Gerais	-12.91%	1.22%	0.81%

Summary

L.B. Foster beats Usinas Siderurgicas de Minas Gerais on 12 of the 14 factors compared between the two stocks.

About L.B. Foster

L.B. Foster Company provides engineered and manufactured products and services for the building and infrastructure projects in the United States, Canada, the United Kingdom, and internationally. It operates through two segments: Rail, Technologies, and Services; and Infrastructure Solutions. The Rail, Technologies, and Services segment offers new rail to passenger and short line freight railroads, industrial companies, and rail contractors, as well as used rails; rail accessories, such as rack spikes, bolts, angle bars, tie plates, and other products; insulated rail joints and related accessories; fixation fasteners, coverboards, and special accessories; and trackwork products. This segment also provides engineered concrete railroad ties, friction management products and application systems, railroad condition monitoring systems and equipment including wheel impact load detection systems, wayside data collection and management systems, and rockfall, flood, earthworks, and bridge strike monitoring; and aftermarket services. The Infrastructure Solutions segment manufactures precast concrete products for use as restrooms, concession stands, and protective storage buildings under the CXT brand for national, state, and municipal parks; and manufactures sounds walls, bridge beams, box culverts, septic tanks, and other custom pre-stressed and precast concrete products. This segment also provides steel bridge products; corrosion protection solutions; concrete-reinforced steel grid decking, open steel grid deck, aluminum bridge railing, and stay-in-place steel bridge forms; cuts, threads, and paints pipe; threading services for water well applications; protective pipeline coating services; and turnkey solutions for metering and injection systems for oil and gas markets. L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.

About Usinas Siderurgicas de Minas Gerais

Usinas Siderúrgicas de Minas Gerais S.A. manufactures and markets flat steel products in Brazil and internationally. The company operates through three segments: Mining and Logistics, Steel Metallurgy, and Steel Transformation. It extracts and process iron ore, such as pellet and sinter feed and, granulated iron ore; provides storage, handling, and road cargo transportation services; and operates highway and railway cargo terminals. It also manufactures and sells steel products; manufactures and installs equipment for various industries; and transforms cold-rolled coils into hot-dip galvanized coils. In addition, the company provides technology transfer services for steel industry; project management and services for civil construction and capital goods industry; road transportation of flat steel; and texturing and chrome plating of cylinders. It serves automotive, construction, distribution, energy, white line, oil and gas, and machines and equipment markets. Usinas Siderúrgicas de Minas Gerais S.A. was founded in 1956 and is headquartered in Belo Horizonte, Brazil.