Head-To-Head Survey: SunCoke Energy (NYSE:SXC) vs. Worthington Steel (NYSE:WS)

Worthington Steel (NYSE:WS) and SunCoke Energy (NYSE:SXC) are both small-cap materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Valuation and Earnings

This table compares Worthington Steel and SunCoke Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Worthington Steel	$3.44 billion	0.54	$8.50 million	$1.39	26.07
SunCoke Energy	$1.84 billion	0.44	-$44.20 million	($0.64)	-14.98

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

Institutional and Insider Ownership

45.4% of Worthington Steel shares are owned by institutional investors. Comparatively, 90.5% of SunCoke Energy shares are owned by institutional investors. 2.7% of Worthington Steel shares are owned by insiders. Comparatively, 1.7% of SunCoke Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Worthington Steel and SunCoke Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Worthington Steel	0.50%	8.87%	4.89%
SunCoke Energy	-2.88%	6.37%	2.28%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Worthington Steel and SunCoke Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Worthington Steel	0	2	1	0	2.33
SunCoke Energy	1	1	0	0	1.50

Worthington Steel presently has a consensus price target of $46.00, indicating a potential upside of 26.92%. SunCoke Energy has a consensus price target of $9.00, indicating a potential downside of 6.13%. Given Worthington Steel’s stronger consensus rating and higher probable upside, research analysts plainly believe Worthington Steel is more favorable than SunCoke Energy.

Dividends

Worthington Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.8%. SunCoke Energy pays an annual dividend of $0.48 per share and has a dividend yield of 5.0%. Worthington Steel pays out 46.0% of its earnings in the form of a dividend. SunCoke Energy pays out -75.0% 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. SunCoke Energy has raised its dividend for 4 consecutive years. SunCoke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Worthington Steel has a beta of 2.27, suggesting that its share price is 127% more volatile than the S&P 500. Comparatively, SunCoke Energy has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Summary

Worthington Steel beats SunCoke Energy on 13 of the 17 factors compared between the two stocks.

About Worthington Steel

Worthington Steel, Inc. operates as a steel processor in North America. It offers carbon flat-rolled steel and tailor welded blanks, as well as electrical steel laminations; and aluminum tailor welded blanks. The company serves various end-markets, including automotive, heavy truck, agriculture, construction, and energy. Worthington Steel, Inc. was incorporated in 2023 and is based in Columbus, Ohio.

About SunCoke Energy

SunCoke Energy, Inc. operates as an independent producer of coke in the Americas and Brazil. The company operates through three segments: Domestic Coke, Brazil Coke, and Logistics. It offers metallurgical and thermal coal. The company also provides handling and/or mixing services to steel, coke, electric utility, coal producing, and other manufacturing based customers. In addition, it owns and operates cokemaking facilities in the United States and Brazil. The company was founded in 1960 and is headquartered in Lisle, Illinois.