AK Steel (NYSE:AKS) and SUMITOMO Corp/S (OTCMKTS:SSUMY) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Dividends

SUMITOMO Corp/S pays an annual dividend of $0.48 per share and has a dividend yield of 3.0%. AK Steel does not pay a dividend. SUMITOMO Corp/S pays out 21.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for AK Steel and SUMITOMO Corp/S, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AK Steel 2 6 6 0 2.29
SUMITOMO Corp/S 0 0 0 0 N/A

AK Steel currently has a consensus price target of $5.33, suggesting a potential upside of 14.31%. Given AK Steel’s higher probable upside, equities research analysts clearly believe AK Steel is more favorable than SUMITOMO Corp/S.

Institutional and Insider Ownership

65.0% of AK Steel shares are owned by institutional investors. Comparatively, 0.1% of SUMITOMO Corp/S shares are owned by institutional investors. 1.1% of AK Steel shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares AK Steel and SUMITOMO Corp/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AK Steel -0.44% 33.56% 1.92%
SUMITOMO Corp/S 6.50% 12.10% 4.10%

Risk and Volatility

AK Steel has a beta of 2.82, meaning that its share price is 182% more volatile than the S&P 500. Comparatively, SUMITOMO Corp/S has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Earnings and Valuation

This table compares AK Steel and SUMITOMO Corp/S’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AK Steel $6.08 billion 0.24 $6.19 million $0.31 15.03
SUMITOMO Corp/S $44.56 billion 0.45 $2.85 billion $2.28 7.08

SUMITOMO Corp/S has higher revenue and earnings than AK Steel. SUMITOMO Corp/S is trading at a lower price-to-earnings ratio than AK Steel, indicating that it is currently the more affordable of the two stocks.

Summary

AK Steel beats SUMITOMO Corp/S on 8 of the 15 factors compared between the two stocks.

About AK Steel

AK Steel Holding Corporation, through its subsidiary, AK Steel Corporation, produces flat-rolled carbon, stainless, and electrical steels, and tubular products in the United States and internationally. It produces flat-rolled carbon steel products, including coated, cold-rolled, and hot-rolled carbon steel products; grain-oriented specialty stainless and electrical steels; and carbon and stainless steel tubing products. The company also buys and sells steel and steel products, as well as other materials; and produces metallurgical coal from reserves in Somerset County, Pennsylvania. It sells its flat-rolled carbon steel products primarily to automotive manufacturers; customers in the infrastructure and manufacturing markets, including the manufacturers of power transmission and distribution transformers, who produce equipment for the electrical grid, as well as electrical motors and generators; and manufacturers of heating, ventilation and air conditioning equipment, and appliances. The company also sells its carbon steel products to distributors, service centers, and converters. AK Steel Holding Corporation was founded in 1993 and is headquartered in West Chester, Ohio.

About SUMITOMO Corp/S

Sumitomo Corporation, together with its subsidiaries, imports, exports, and trades in various goods and commodities worldwide. The company's Metal Products segment provides steel products, including steel sheets and tubular products, as well as non-ferrous metal products, such as aluminum and titanium. Its Transportation & Construction Systems segment offers products and services related to ships, aircraft, transportation systems, motor vehicles, construction equipment, and related components and parts. This segment activities range from trading, leasing, and financing to designing and arranging the construction of public transportation systems. The company's Environment & Infrastructure segment engages in the social infrastructure business, such as electricity, water supply, and railroad projects; renewable energy business comprising solar photovoltaic, geothermal, and wind power generation; environmental business consisting of storage battery activities; industrial infrastructure business, such as industrial facilities and equipment; and logistics, insurance, and industrial-park-related businesses. Its Media, ICT, Lifestyle Related Goods & Services segment engages in the areas of media, ICT, lifestyle/retail, food/food product, materials and supplies, and real estate businesses. The company's Mineral Resources, Energy, Chemical & Electronics segment engages in mineral resources, energy, basic chemicals, electronics, and life sciences businesses. This segment also trades in petroleum products, liquefied petroleum gas, storage batteries, carbon products, plastics, organic and inorganic chemicals, silicon wafers, LEDs, pharmaceuticals, agricultural chemicals, household insecticide, fertilizers, and veterinary drugs; and provision of electronics manufacturing services. The company has a strategic partnership with ITM Power plc for the development of multi-megawatt projects in Japan. Sumitomo Corporation was founded in 1919 and is headquartered in Tokyo, Japan.

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