Universal Stainless & Alloy Products (NASDAQ: USAP) and Haynes International (NASDAQ:HAYN) are both small-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Dividends

Haynes International pays an annual dividend of $0.88 per share and has a dividend yield of 2.8%. Universal Stainless & Alloy Products does not pay a dividend. Haynes International pays out -314.3% of its earnings in the form of a dividend.

Risk & Volatility

Universal Stainless & Alloy Products has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Haynes International has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Insider and Institutional Ownership

83.5% of Universal Stainless & Alloy Products shares are owned by institutional investors. Comparatively, 98.6% of Haynes International shares are owned by institutional investors. 11.6% of Universal Stainless & Alloy Products shares are owned by insiders. Comparatively, 4.4% of Haynes International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Universal Stainless & Alloy Products and Haynes International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Stainless & Alloy Products -1.20% -0.91% -0.55%
Haynes International -4.05% -5.19% -2.47%

Earnings & Valuation

This table compares Universal Stainless & Alloy Products and Haynes International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Universal Stainless & Alloy Products $175.29 million 0.74 $17.87 million ($0.29) -62.28
Haynes International $401.97 million 0.96 $13.03 million ($0.28) -111.57

Universal Stainless & Alloy Products has higher revenue, but lower earnings than Haynes International. Haynes International is trading at a lower price-to-earnings ratio than Universal Stainless & Alloy Products, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Universal Stainless & Alloy Products and Haynes International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Stainless & Alloy Products 0 1 2 0 2.67
Haynes International 0 1 1 0 2.50

Universal Stainless & Alloy Products presently has a consensus target price of $19.00, suggesting a potential upside of 5.20%. Haynes International has a consensus target price of $36.50, suggesting a potential upside of 16.84%. Given Haynes International’s higher probable upside, analysts clearly believe Haynes International is more favorable than Universal Stainless & Alloy Products.

Summary

Haynes International beats Universal Stainless & Alloy Products on 8 of the 15 factors compared between the two stocks.

About Universal Stainless & Alloy Products

Universal Stainless & Alloy Products, Inc. manufactures and markets semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. The Company’s manufacturing process involves melting, remelting, heat treating, hot and cold rolling, forging, machining and cold drawing of semi-finished and finished specialty steels. The Company also performs conversion services on materials supplied by customers. The Company’s manufacturing locations include Bridgeville and Titusville, Pennsylvania; Dunkirk, New York, and North Jackson, Ohio. The Company produce a range of specialty steel grades using several manufacturing processes, including argon oxygen decarburization (AOD), electro-slag remelted (ESR), vacuum induction melting (VIM) and vacuum-arc remelted (VAR). It manufactures its products within the product lines, including Stainless Steel, High-Strength Low Alloy Steel, Tool Steel and High-Temperature Alloy Steel.

About Haynes International

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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