Carpenter Technology Corporation (NYSE: CRS) and Northwest Pipe (NASDAQ:NWPX) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitabiliy, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Earnings & Valuation

This table compares Carpenter Technology Corporation and Northwest Pipe’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carpenter Technology Corporation $1.75 billion 1.01 $204.20 million $0.78 48.58
Northwest Pipe $151.99 million 1.01 -$5.45 million ($0.37) -43.24

Carpenter Technology Corporation has higher revenue and earnings than Northwest Pipe. Northwest Pipe is trading at a lower price-to-earnings ratio than Carpenter Technology Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

94.9% of Carpenter Technology Corporation shares are owned by institutional investors. Comparatively, 78.5% of Northwest Pipe shares are owned by institutional investors. 3.6% of Carpenter Technology Corporation shares are owned by company insiders. Comparatively, 2.0% of Northwest Pipe shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Carpenter Technology Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.9%. Northwest Pipe does not pay a dividend. Carpenter Technology Corporation pays out 92.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings and recommmendations for Carpenter Technology Corporation and Northwest Pipe, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carpenter Technology Corporation 0 2 3 0 2.60
Northwest Pipe 0 1 0 0 2.00

Carpenter Technology Corporation presently has a consensus target price of $43.00, suggesting a potential upside of 13.49%. Northwest Pipe has a consensus target price of $9.00, suggesting a potential downside of 43.75%. Given Carpenter Technology Corporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe Carpenter Technology Corporation is more favorable than Northwest Pipe.

Profitability

This table compares Carpenter Technology Corporation and Northwest Pipe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carpenter Technology Corporation 2.08% 3.57% 1.44%
Northwest Pipe -2.34% -3.95% -3.39%

Risk & Volatility

Carpenter Technology Corporation has a beta of 2.07, indicating that its share price is 107% more volatile than the S&P 500. Comparatively, Northwest Pipe has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Summary

Carpenter Technology Corporation beats Northwest Pipe on 14 of the 15 factors compared between the two stocks.

About Carpenter Technology Corporation

Carpenter Technology Corporation is engaged in the manufacturing, fabrication and distribution of specialty metals. The Company’s segments include Specialty Alloys Operations (SAO) and Performance Engineered Products (PEP). Its SAO segment consists of alloy and stainless steel manufacturing operations. Its PEP segment includes the Dynamet titanium business, the Carpenter Powder Products business, the Amega West business, the Specialty Steel Supply business and the Latrobe and Mexico distribution businesses. It develops, manufactures and distributes cast/wrought and powder metal stainless steels, and special alloys, including high temperature (iron-nickel-cobalt base), stainless, corrosion resistant, controlled expansion alloys, ultra-high strength and implantable alloys, tool and die steels and other specialty metals, as well as cast/wrought titanium alloys. The Company manufactures and rents down-hole drilling tools and components used in the oil and gas industry.

About Northwest Pipe

Northwest Pipe Company is a manufacturer of engineered steel pipe water systems. The Company operates through two segments. The Water Transmission segment produces steel pipeline systems for use in drinking water infrastructure, and has approximately eight manufacturing facilities, located in Portland, Oregon; Denver, Colorado; Adelanto, California; Parkersburg, West Virginia; Saginaw, Texas; St. Louis, Missouri; Salt Lake City, Utah, and Monterrey, Mexico. The Tubular Products segment produces steel line pipe products for energy applications, and has a manufacturing facility located in Atchison, Kansas. The Company, through Water Transmission Group, produces engineered welded steel pipe products for use in water transmission applications. It also manufactures smaller diameter electric resistance welded (ERW) steel pipe through its Tubular Products Group. The Company’s solutions-based products are used in water transmission, plant piping, tunnels and river crossings applications.

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