Aperam (APEMY) & Steel Dynamics (STLD) Critical Contrast

Aperam (OTCMKTS: APEMY) and Steel Dynamics (NASDAQ:STLD) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Valuation & Earnings

This table compares Aperam and Steel Dynamics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aperam $5.05 billion 0.84 $361.00 million $4.29 11.55
Steel Dynamics $9.54 billion 1.16 $812.74 million $2.65 17.71

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

Institutional & Insider Ownership

0.0% of Aperam shares are held by institutional investors. Comparatively, 85.5% of Steel Dynamics shares are held by institutional investors. 4.4% of Steel Dynamics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Aperam and Steel Dynamics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aperam 7.15% 11.84% 6.89%
Steel Dynamics 8.59% 21.60% 9.74%

Dividends

Aperam pays an annual dividend of $1.34 per share and has a dividend yield of 2.7%. Steel Dynamics pays an annual dividend of $0.75 per share and has a dividend yield of 1.6%. Aperam pays out 31.2% of its earnings in the form of a dividend. Steel Dynamics pays out 28.3% 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.

Volatility & Risk

Aperam has a beta of 2.23, meaning that its share price is 123% more volatile than the S&P 500. Comparatively, Steel Dynamics has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Aperam and Steel Dynamics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aperam 0 0 0 0 N/A
Steel Dynamics 0 4 12 0 2.75

Steel Dynamics has a consensus target price of $50.00, indicating a potential upside of 6.56%. Given Steel Dynamics’ higher possible upside, analysts clearly believe Steel Dynamics is more favorable than Aperam.

Summary

Steel Dynamics beats Aperam on 12 of the 15 factors compared between the two stocks.

About Aperam

Aperam S.A., together with its subsidiaries, produces and sells stainless and specialty steel products worldwide. The company operates through three segments: Stainless & Electrical Steel; Services & Solutions; and Alloys & Specialties. It offers stainless steel and electrical steel products, including grain oriented, non-grain oriented, and non-grain oriented semi-processed steel products. The company is also involved in the distribution operations; and the provision of value added and customized steel solutions. In addition, it designs, produces, and transforms nickel alloys and other specific stainless steels in various forms, such as bars, semis, cold-rolled strips, wire and wire rods, and plates. The company serves customers in aerospace, automotive, catering, construction, household appliances and electrical engineering, industrial processes, medical, and oil and gas industries. It distributes its products through a network of service centers, transformation facilities, and sales offices. Aperam S.A. was incorporated in 2010 and is headquartered in Luxembourg, Luxembourg.

About Steel Dynamics

Steel Dynamics, Inc., together with its subsidiaries, engages in the steel products manufacturing and metals recycling businesses in the United States and internationally. The company operates through three segments: Steel Operations, Metals Recycling Operations, and Steel Fabrication Operations. The Steel Operations segment provides hot roll, cold roll, and coated steel products; structural steel beams, pilings, and standard and premium grade rail products; engineered special-bar-quality products; merchant bar products, including angles, merchant rounds, flats, channels, and reinforcing bars; beams, channels, and specialty steel sections; and threaded rod products, and cold drawn and heat treated bars. Its products are used in construction, automotive, manufacturing, transportation, heavy and agriculture equipment, and pipe and tube industry sectors. This segment sells its products directly to end-users, steel fabricators, and service centers. The Metals Recycling Operations segment is involved in the purchase, process, and resale of ferrous and nonferrous scrap metals into reusable forms and grades. Its ferrous products include heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast iron products; and nonferrous products comprise aluminum, brass, copper, stainless steel, and other nonferrous metals. This segment also provides transportation logistics, scrap management, marketing, and brokerage services. The Steel Fabrication Operations segment produces steel building components comprising steel joists, girders, trusses, and steel deck products for non-residential steel fabricators. Steel Dynamics, Inc. was founded in 1993 and is headquartered in Fort Wayne, Indiana.

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