Analyzing Steel Dynamics (STLD) & Mechel PAO (MTL)

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

Dividends

Steel Dynamics pays an annual dividend of $0.62 per share and has a dividend yield of 1.8%. Mechel PAO does not pay a dividend. Steel Dynamics pays out 28.6% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Steel Dynamics and Mechel PAO’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Steel Dynamics $8.77 billion 0.93 $1.37 billion $2.17 15.71
Mechel PAO $9.52 billion 0.12 $2.49 billion N/A N/A

Mechel PAO has higher revenue and earnings than Steel Dynamics.

Risk and Volatility

Steel Dynamics has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Mechel PAO has a beta of -1.09, indicating that its stock price is 209% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Steel Dynamics and Mechel PAO, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Steel Dynamics 0 4 11 0 2.73
Mechel PAO 1 0 0 0 1.00

Steel Dynamics currently has a consensus price target of $41.07, suggesting a potential upside of 20.51%. Given Steel Dynamics’ stronger consensus rating and higher probable upside, analysts clearly believe Steel Dynamics is more favorable than Mechel PAO.

Profitability

This table compares Steel Dynamics and Mechel PAO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Steel Dynamics 6.07% 21.75% 9.34%
Mechel PAO N/A N/A N/A

Insider and Institutional Ownership

82.6% of Steel Dynamics shares are owned by institutional investors. Comparatively, 8.3% of Mechel PAO shares are owned by institutional investors. 4.2% of Steel Dynamics shares are owned by insiders. Comparatively, 36.3% of Mechel PAO shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Steel Dynamics beats Mechel PAO on 10 of the 14 factors compared between the two stocks.

About Steel Dynamics

Steel Dynamics, Inc. is a steel producing and a metal recycling company. The Company is engaged in the manufacture and sale of steel products, processing and sale of recycled ferrous and nonferrous metals, and fabrication and sale of steel joists and deck products. Its segments include steel operations, metals recycling operations, steel fabrication operations and Other Operations. It offers a range of steel products, such as sheet products, long products and steel finishing. The steel operations segment includes Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia and Iron Dynamics. The metals recycling operations segment consists of OmniSource Corporation. The fabrication operations produce steel building components. The Other Operations segment consists of subsidiary operations and smaller joint ventures.

About Mechel PAO

Mechel PAO, formerly Mechel OAO, is a holding company. The Company operates in the mining, steel and power industry segments. Its segments include Steel segment, comprising production and sales of semi-finished steel products, carbon and specialty long products, carbon and stainless flat products, and value-added downstream metal products, including forgings, stampings, and hardware, and ferrosilicon; Mining segment, comprising production and sales of coal (coking and steam), and middlings, coke and chemical products, and iron ore, which supplies raw materials to the Steel and Power segments, and also sells raw materials to third parties, and Power segment, comprising generation and sales of electricity and heat power, which supplies electricity and heat power to the Steel and Mining segments, and also sells a portion of electricity and heat power to third parties. It has freight seaports in Russia on the Sea of Japan and on the Sea of Azov, and a freight river port on the Kama River.

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