Schnitzer Steel Industries (NASDAQ: SCHN) and Haynes International (NASDAQ:HAYN) are both small-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitabiliy and risk.
Insider and Institutional Ownership
83.2% of Schnitzer Steel Industries shares are owned by institutional investors. Comparatively, 98.2% of Haynes International shares are owned by institutional investors. 3.8% of Schnitzer Steel Industries shares are owned by company insiders. Comparatively, 4.4% of Haynes International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Schnitzer Steel Industries has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, Haynes International has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Schnitzer Steel Industries and Haynes International, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Schnitzer Steel Industries | 0 | 1 | 0 | 0 | 2.00 |
| Haynes International | 0 | 2 | 1 | 0 | 2.33 |
Haynes International has a consensus target price of $37.33, suggesting a potential upside of 16.05%. Given Haynes International’s stronger consensus rating and higher possible upside, analysts plainly believe Haynes International is more favorable than Schnitzer Steel Industries.
Profitability
This table compares Schnitzer Steel Industries and Haynes International’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Schnitzer Steel Industries | 2.68% | 8.34% | 4.65% |
| Haynes International | 0.84% | 0.31% | 0.15% |
Dividends
Schnitzer Steel Industries pays an annual dividend of $0.75 per share and has a dividend yield of 3.0%. Haynes International pays an annual dividend of $0.88 per share and has a dividend yield of 2.7%. Schnitzer Steel Industries pays out 49.0% of its earnings in the form of a dividend. Haynes International pays out -314.3% 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.
Valuation and Earnings
This table compares Schnitzer Steel Industries and Haynes International’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Schnitzer Steel Industries | $1.58 billion | 0.44 | $90.43 million | $1.53 | 16.44 |
| Haynes International | $405.25 million | 0.98 | $23.76 million | ($0.28) | -114.89 |
Schnitzer Steel Industries has higher revenue and earnings than Haynes International. Haynes International is trading at a lower price-to-earnings ratio than Schnitzer Steel Industries, indicating that it is currently the more affordable of the two stocks.
Summary
Haynes International beats Schnitzer Steel Industries on 9 of the 16 factors compared between the two stocks.
Schnitzer Steel Industries Company Profile
Schnitzer Steel Industries, Inc. is a recycler of ferrous and nonferrous scrap metal, including end-of-life vehicles, and a manufacturer of finished steel products. The Company operates through two segments: the Auto and Metals Recycling (AMR) business and the Steel Manufacturing Business (SMB). The AMR segment collects and recycles auto bodies, rail cars, home appliances, industrial machinery, manufacturing scrap and construction and demolition scrap from bridges, buildings and other infrastructure. AMR’s primary products include recycled ferrous and nonferrous scrap metal. The SMB segment produces finished steel products such as rebar, wire rod, coiled rebar, merchant bar and other specialty products using 100% recycled metal sourced from AMR. SMB’s products are primarily used in nonresidential and infrastructure construction in North America. SMB operates a steel mini-mill in McMinnville, Oregon that produces finished steel products using recycled metal and other raw materials.
Haynes International Company Profile
Haynes International, Inc. (Haynes) is a producer of nickel- and cobalt-based alloys in flat product forms, such as sheet, coil and plate forms. The Company also produces its products as seamless and welded tubulars, and in slab, bar, billet and wire forms. It focuses on developing, manufacturing, marketing and distributing alloys, which are sold in the aerospace, chemical processing and industrial gas turbine industries. Its products consist of high-temperature resistant alloys (HTA) products and corrosion-resistant alloys (CRA) products. Its HTA products are used in manufacturing components for the hot sections of gas turbine engines. Its CRA products are used in a range of applications, such as chemical processing, power plant emissions control, hazardous waste treatment, sour gas production and pharmaceutical vessels. The Company has a four-high Steckel rolling mill used in hot rolling high-performance alloys. The Company has operations in the United States, Europe and China.
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