Nucor Corporation (NYSE: NUE) and National Steel Company (NYSE:SID) are both mid-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitabiliy, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Nucor Corporation and National Steel Company’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nucor Corporation 5.90% 12.63% 6.76%
National Steel Company N/A N/A N/A

Dividends

Nucor Corporation pays an annual dividend of $1.51 per share and has a dividend yield of 2.5%. National Steel Company does not pay a dividend. Nucor Corporation pays out 47.5% of its earnings in the form of a dividend. Nucor Corporation has raised its dividend for 43 consecutive years and National Steel Company has raised its dividend for 2 consecutive years.

Insider & Institutional Ownership

76.5% of Nucor Corporation shares are held by institutional investors. Comparatively, 3.3% of National Steel Company shares are held by institutional investors. 0.7% of Nucor Corporation shares are held by company 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.

Risk and Volatility

Nucor Corporation has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, National Steel Company has a beta of 2.25, meaning that its share price is 125% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Nucor Corporation and National Steel Company, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nucor Corporation 0 4 11 0 2.73
National Steel Company 0 0 0 0 N/A

Nucor Corporation currently has a consensus price target of $69.07, suggesting a potential upside of 15.66%. Given Nucor Corporation’s higher possible upside, equities research analysts clearly believe Nucor Corporation is more favorable than National Steel Company.

Earnings and Valuation

This table compares Nucor Corporation and National Steel Company’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nucor Corporation $17.31 billion 1.10 $2.54 billion $3.18 18.78
National Steel Company $4.95 billion 0.65 $885.57 million $0.25 9.52

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

Summary

Nucor Corporation beats National Steel Company on 14 of the 16 factors compared between the two stocks.

About Nucor Corporation

Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

About National Steel Company

Companhia Siderurgica Nacional is a Brazil-based company engaged in the steel industry. The Company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a range of steel products, including coated galvanized flat steel and tinplate. The Company operates in five segments: Steel, Mining, Cement, Logistics and Energy. The Steel segment focuses on the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel, with operations in Brazil, the United States, Portugal and Germany. The Mining segment encompasses the activities of iron ore and tin mining. The Cement segment is responsible for the cement production, distribution and sale operations. The Logistics segment manages port terminal for containers, as well as railway networks. The Energy segment includes generation of electric power. The Company is controlled by Vicunha Acos SA.

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