Ryerson Holding Corporation (RYI) and Reliance Steel & Aluminum Co. (NYSE:RS) Critical Survey
Ryerson Holding Corporation (NYSE: RYI) and Reliance Steel & Aluminum Co. (NYSE:RS) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitabiliy.
Reliance Steel & Aluminum Co. pays an annual dividend of $1.80 per share and has a dividend yield of 2.5%. Ryerson Holding Corporation does not pay a dividend. Reliance Steel & Aluminum Co. pays out 40.5% of its earnings in the form of a dividend. Ryerson Holding Corporation has increased its dividend for 6 consecutive years.
This table compares Ryerson Holding Corporation and Reliance Steel & Aluminum Co.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ryerson Holding Corporation||0.67%||-61.00%||2.11%|
|Reliance Steel & Aluminum Co.||3.57%||8.67%||4.82%|
Institutional & Insider Ownership
39.7% of Ryerson Holding Corporation shares are owned by institutional investors. Comparatively, 82.5% of Reliance Steel & Aluminum Co. shares are owned by institutional investors. 0.8% of Ryerson Holding Corporation shares are owned by insiders. Comparatively, 3.7% of Reliance Steel & Aluminum Co. 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.
Volatility and Risk
Ryerson Holding Corporation has a beta of 2.12, meaning that its stock price is 112% more volatile than the S&P 500. Comparatively, Reliance Steel & Aluminum Co. has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.
Earnings & Valuation
This table compares Ryerson Holding Corporation and Reliance Steel & Aluminum Co.’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ryerson Holding Corporation||$2.97 billion||0.11||$181.30 million||$0.57||15.00|
|Reliance Steel & Aluminum Co.||$9.14 billion||0.57||$853.50 million||$4.44||16.22|
Reliance Steel & Aluminum Co. has higher revenue and earnings than Ryerson Holding Corporation. Ryerson Holding Corporation is trading at a lower price-to-earnings ratio than Reliance Steel & Aluminum Co., indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for Ryerson Holding Corporation and Reliance Steel & Aluminum Co., as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ryerson Holding Corporation||0||3||2||0||2.40|
|Reliance Steel & Aluminum Co.||0||3||6||0||2.67|
Ryerson Holding Corporation presently has a consensus target price of $14.80, suggesting a potential upside of 73.10%. Reliance Steel & Aluminum Co. has a consensus target price of $81.17, suggesting a potential upside of 12.70%. Given Ryerson Holding Corporation’s higher probable upside, research analysts plainly believe Ryerson Holding Corporation is more favorable than Reliance Steel & Aluminum Co..
Reliance Steel & Aluminum Co. beats Ryerson Holding Corporation on 13 of the 17 factors compared between the two stocks.
About Ryerson Holding Corporation
Ryerson Holding Corporation is a service center company for carbon and stainless steel, as well as aluminum. The Company operates through metal service centers segment. In addition to providing a range of flat and long metals products, it offers various value-added processing and fabrication services, such as sawing, slitting, blanking, cutting to length, leveling, flame cutting, laser cutting, edge trimming, edge rolling, roll forming, tube manufacturing, polishing, shearing, forming, stamping, punching, rolling shell plate to radius and beveling to process materials to a specified thickness, length, width, shape and surface quality pursuant to specific customer orders. Its services include just-in-time inventory programs, production of kits containing multiple products for ease of assembly by the customer, consignment arrangements and the placement of its employees at a customer’s site for inventory management, and production and technical assistance.
About Reliance Steel & Aluminum Co.
Reliance Steel & Aluminum Co. is a metals service center company in North America (the United States and Canada). As of December 31, 2016, the Company’s network of metals service centers operated over 300 locations in 39 states in the United States and in 12 other countries (Australia, Belgium, Canada, China, France, Malaysia, Mexico, Singapore, South Korea, Turkey, the United Arab Emirates and the United Kingdom). As of December 31, 2016, it provided metals processing services and distributes a range of more than 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium and specialty steel products in a range of industries. Its various metals service centers process and distribute only specialty metals. It delivers a range of products from facilities located across the United States and Canada. It provides a range of processing services for its customers’ and delivers products to fabricators, manufacturers and other end users.
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