Ternium (TX) vs. Carpenter Technology (CRS) Financial Comparison

Ternium (NYSE: TX) and Carpenter Technology (NYSE:CRS) are both mid-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.

Profitability

This table compares Ternium and Carpenter Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ternium 9.47% 16.99% 8.80%
Carpenter Technology 8.36% 8.23% 3.61%

Dividends

Ternium pays an annual dividend of $1.10 per share and has a dividend yield of 2.8%. Carpenter Technology pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. Ternium pays out 24.4% of its earnings in the form of a dividend. Carpenter Technology pays out 66.7% 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. Ternium is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

17.8% of Ternium shares are owned by institutional investors. Comparatively, 98.0% of Carpenter Technology shares are owned by institutional investors. 0.0% of Ternium shares are owned by insiders. Comparatively, 4.5% of Carpenter Technology 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.

Volatility & Risk

Ternium has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Carpenter Technology has a beta of 2.01, indicating that its share price is 101% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Ternium and Carpenter Technology, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ternium 0 1 4 0 2.80
Carpenter Technology 0 2 2 0 2.50

Ternium currently has a consensus target price of $35.33, indicating a potential downside of 11.53%. Carpenter Technology has a consensus target price of $50.67, indicating a potential downside of 11.20%. Given Carpenter Technology’s higher possible upside, analysts plainly believe Carpenter Technology is more favorable than Ternium.

Earnings and Valuation

This table compares Ternium and Carpenter Technology’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ternium $9.70 billion 0.83 $886.21 million $4.51 8.86
Carpenter Technology $1.80 billion 1.49 $47.00 million $1.08 52.83

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

Summary

Ternium beats Carpenter Technology on 10 of the 16 factors compared between the two stocks.

About Ternium

Ternium S.A. manufactures and processes various steel products in Mexico, Argentina, Bolivia, Chile, Paraguay, Uruguay, Colombia, the United States, Central America, and internationally. The company operates in two segments, Steel and Mining. The Steel segment offers steel products, such as slabs, billets and round bars, hot-rolled coils and sheets, bars and stirrups, wire rods, cold-rolled coils and sheets, tin plates, hot dipped galvanized and electrogalvanized sheets, pre-painted sheets, steel pipes and tubular products, beams, roll formed products, and other products. The Mining segment sells iron ore concentrates and pellets. The company serves various companies and small businesses operating in construction, automotive, home appliances, capital goods, container, food, and energy industries. Ternium S.A. was founded in 1961 and is headquartered in Buenos Aires, Argentina. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.

About Carpenter Technology

Carpenter Technology Corporation manufactures, fabricates, and distributes specialty metals worldwide. It operates through two segments, Specialty Alloys Operations and Performance Engineered Products. The company offers specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels, and tool steels. It also manufactures and rents down-hole drilling tools and components for use in the oil and gas industry. The company serves aerospace and defense, energy, transportation, medical and industrial, and consumer industries. Carpenter Technology Corporation was founded in 1889 and is headquartered in Philadelphia, Pennsylvania.

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