Nucor (NYSE: NUE) and United States Steel (NYSE:X) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, valuation, profitability, analyst recommendations, earnings and dividends.

Insider & Institutional Ownership

74.3% of Nucor shares are held by institutional investors. Comparatively, 64.2% of United States Steel shares are held by institutional investors. 0.7% of Nucor shares are held by insiders. Comparatively, 1.0% of United States Steel shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Nucor and United States Steel, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nucor 0 5 9 0 2.64
United States Steel 2 6 9 0 2.41

Nucor currently has a consensus target price of $67.18, indicating a potential downside of 1.55%. United States Steel has a consensus target price of $30.69, indicating a potential downside of 22.15%. Given Nucor’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Nucor is more favorable than United States Steel.

Valuation & Earnings

This table compares Nucor and United States Steel’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nucor $16.21 billion 1.34 $796.27 million $3.59 19.01
United States Steel $10.26 billion 0.67 -$440.00 million $0.68 57.97

Nucor has higher revenue and earnings than United States Steel. Nucor is trading at a lower price-to-earnings ratio than United States Steel, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Nucor has a beta of 1.58, indicating that its share price is 58% more volatile than the S&P 500. Comparatively, United States Steel has a beta of 3, indicating that its share price is 200% more volatile than the S&P 500.

Profitability

This table compares Nucor and United States Steel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nucor 5.80% 12.78% 6.87%
United States Steel 1.05% 10.27% 2.67%

Dividends

Nucor pays an annual dividend of $1.52 per share and has a dividend yield of 2.2%. United States Steel pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Nucor pays out 42.3% of its earnings in the form of a dividend. United States Steel pays out 29.4% 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. United States Steel has raised its dividend for 44 consecutive years.

Summary

Nucor beats United States Steel on 11 of the 16 factors compared between the two stocks.

Nucor Company Profile

Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

United States Steel Company Profile

United States Steel Corporation is an integrated steel producer. The Company is engaged in producing flat-rolled and tubular products with production operations in North America and Europe. The Company operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE) and Tubular Products (Tubular). The Flat-Rolled segment includes the operating results of its integrated steel plants and equity investees in the United States involved in the production of slabs, rounds, strip mill plates, sheets and tin mill products, as well as all iron ore and coke production facilities in the United States. The USSE segment includes the operating results of U. S. Steel Kosice (USSK) and its integrated steel plant and coke production facilities in Slovakia. The Tubular segment includes the operating results of its tubular production facilities, primarily in the United States and equity investees in the United States and Brazil.

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