Head to Head Analysis: WESCO International (NYSE:WCC) and Ryerson (NYSE:RYZ)

Ryerson (NYSE:RYZ) and WESCO International (NYSE:WCC) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Valuation & Earnings

This table compares Ryerson and WESCO International”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ryerson	$4.57 billion	0.28	-$56.40 million	($1.24)	-20.20
WESCO International	$23.51 billion	0.74	$640.20 million	$14.47	24.62

WESCO International has higher revenue and earnings than Ryerson. Ryerson is trading at a lower price-to-earnings ratio than WESCO International, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for Ryerson and WESCO International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ryerson	1	2	0	0	1.67
WESCO International	0	1	6	1	3.00

WESCO International has a consensus price target of $394.17, indicating a potential upside of 10.63%. Given WESCO International’s stronger consensus rating and higher probable upside, analysts clearly believe WESCO International is more favorable than Ryerson.

Profitability

This table compares Ryerson and WESCO International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ryerson	-0.56%	-0.62%	-0.21%
WESCO International	2.84%	14.95%	4.45%

Dividends

Ryerson pays an annual dividend of $0.75 per share and has a dividend yield of 3.0%. WESCO International pays an annual dividend of $2.00 per share and has a dividend yield of 0.6%. Ryerson pays out -60.5% of its earnings in the form of a dividend. WESCO International pays out 13.8% 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. WESCO International has increased its dividend for 2 consecutive years. Ryerson is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Ryerson has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500. Comparatively, WESCO International has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Insider and Institutional Ownership

94.8% of Ryerson shares are held by institutional investors. Comparatively, 93.8% of WESCO International shares are held by institutional investors. 6.6% of Ryerson shares are held by insiders. Comparatively, 2.6% of WESCO International shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

WESCO International beats Ryerson on 13 of the 18 factors compared between the two stocks.

About Ryerson

Ryerson Holding Corporation, together with its subsidiaries, processes and distributes industrial metals in the United States, Canada, Mexico, and China. It offers a line of products in carbon steel, stainless steel, alloy steels, and aluminum, as well as nickel and red metals in various shapes and forms, including coils, sheets, rounds, hexagons, square and flat bars, plates, structural, and tubing. The company also provides various processing services, such as bending, beveling, blanking, blasting, burning, cutting-to-length, drilling, embossing, flattening, forming, grinding, laser cutting, machining, notching, painting, perforating, polishing, punching, rolling, sawing, scribing, shearing, slitting, stamping, tapping, threading, welding, or other techniques to process materials. It serves various industries, including commercial ground transportation, metal fabrication and machine shops, industrial machinery and equipment manufacturing, consumer durable equipment, HVAC manufacturing, construction equipment manufacturing, food processing and agricultural equipment manufacturing, and oil and gas. The company was founded in 1842 and is headquartered in Chicago, Illinois.

About WESCO International

WESCO International, Inc. provides business-to-business distribution, logistics services, and supply chain solutions in the United States, Canada, and internationally. It operates through three segments: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility and Broadband Solutions (UBS). The EES segment supplies products and supply chain solutions, including electrical equipment and supplies, automation and connected devices, security, lighting, wire and cable, and safety, as well as maintenance, repair, and operating (MRO) products. This segment also offers contractor solutions, direct and indirect manufacturing supply chain optimization programs, lighting and renewables advisory services, and digital and automation solutions. The CSS segment operates in the network infrastructure and security markets. This segment sells products directly to end-users or through various channels, including data communications contractors, security, network, professional audio/visual, and systems integrators. It also provides safety and energy management solutions. The UBS segment offers products and services to investor-owned utilities; public power companies; and service and wireless providers, broadband operators, and contractors. This segment's products include wire and cables, transformers, transmission and distribution hardware, switches, protective devices, connectors, conduits, pole line hardware, racks, cabinets, safety and MRO products, and point-to-point wireless devices. This segment also offers various service solutions, including fiber project management, high and medium voltage project design and support, pre-wired meters and capacitor banks, meter testing and metering infrastructure installation, personal protective equipment dielectric testing, and tool repair, as well as emergency response, storage yard, materials, and logistics management. The company was founded in 1922 and is headquartered in Pittsburgh, Pennsylvania.