Nippon Steel & Sumitomo Metal (OTCMKTS:NPSCY – Get Free Report) and Outokumpu (OTCMKTS:OUTKY – Get Free Report) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.
Dividends
Nippon Steel & Sumitomo Metal pays an annual dividend of $0.09 per share and has a dividend yield of 2.1%. Outokumpu pays an annual dividend of $0.04 per share and has a dividend yield of 1.4%. Nippon Steel & Sumitomo Metal pays out -450.0% of its earnings in the form of a dividend. Outokumpu pays out -33.3% 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. Nippon Steel & Sumitomo Metal is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Nippon Steel & Sumitomo Metal and Outokumpu”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nippon Steel & Sumitomo Metal | $57.10 billion | 0.41 | $2.31 billion | ($0.02) | -215.50 |
| Outokumpu | $6.43 billion | 0.41 | -$43.28 million | ($0.12) | -23.00 |
Nippon Steel & Sumitomo Metal has higher revenue and earnings than Outokumpu. Nippon Steel & Sumitomo Metal is trading at a lower price-to-earnings ratio than Outokumpu, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Nippon Steel & Sumitomo Metal has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Outokumpu has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Nippon Steel & Sumitomo Metal and Outokumpu, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nippon Steel & Sumitomo Metal | 0 | 0 | 0 | 0 | 0.00 |
| Outokumpu | 1 | 4 | 1 | 0 | 2.00 |
Profitability
This table compares Nippon Steel & Sumitomo Metal and Outokumpu’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nippon Steel & Sumitomo Metal | -0.42% | -0.61% | -0.30% |
| Outokumpu | -1.83% | -2.90% | -1.79% |
Summary
Nippon Steel & Sumitomo Metal beats Outokumpu on 9 of the 13 factors compared between the two stocks.
About Nippon Steel & Sumitomo Metal
Nippon Steel Corporation engages in steelmaking and steel fabrication, engineering and construction, chemicals and materials, and system solutions businesses in Japan and internationally. The company offers steel plates, sheets, and slags; bar and rod materials; structural steel; pipes and tubes; titanium and stainless products; and railway, automotive, and machinery parts for applications in automotive, energy, infrastructure, and consumer electronics markets. It is also involved in construction; waste processing and recycling; supplying electricity, gas, and heat; and the provision of coal-based chemical products, petrochemicals, electronic materials, materials and components for semiconductors and electronic parts, carbon fiber, and composite products. In addition, the company offers computer systems engineering and consulting, IT-enabled outsourcing, and other services. The company was formerly known as Nippon Steel & Sumitomo Metal Corporation and changed its name to Nippon Steel Corporation in April 2019. The company was incorporated in 1950 and is headquartered in Tokyo, Japan.
About Outokumpu
Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally. The company operates through three segments: Europe, Americas, and Ferrochrome. It offers cold rolled coils, strips, and sheets; hot rolled coils, strips, and plates; quarto plates; precision strips; and specialized components, such as welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, hardened and customized press plates, suction roll shells, and blancs and disks. The company also provides stainless steel powder which includes Supra 316L, Dura 17-4PH, Ultra 904L, Therma 253MA, Dura 4116, and Ni-free austenitic stainless steel powder; and nickel-based alloys. Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy; marine; and heavy industries. The company was founded in 1910 and is headquartered in Helsinki, Finland.
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