Contrasting POSCO (NYSE:PKX) & SunCoke Energy (NYSE:SXC)

POSCO (NYSE:PKX) and SunCoke Energy (NYSE:SXC) are both materials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for POSCO and SunCoke Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
POSCO	1	0	1	1	2.67
SunCoke Energy	0	2	0	0	2.00

SunCoke Energy has a consensus price target of $11.00, indicating a potential upside of 13.58%. Given SunCoke Energy’s higher possible upside, analysts plainly believe SunCoke Energy is more favorable than POSCO.

Risk & Volatility

POSCO has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, SunCoke Energy has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Dividends

POSCO pays an annual dividend of $1.15 per share and has a dividend yield of 2.4%. SunCoke Energy pays an annual dividend of $0.48 per share and has a dividend yield of 5.0%. POSCO pays out 43.6% of its earnings in the form of a dividend. SunCoke Energy pays out -73.8% 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. 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.

Institutional and Insider Ownership

90.5% of SunCoke Energy shares are owned by institutional investors. 0.0% of POSCO shares are owned by company insiders. Comparatively, 1.7% of SunCoke Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
POSCO	1.49%	1.68%	0.99%
SunCoke Energy	-2.91%	5.68%	2.01%

Valuation & Earnings

This table compares POSCO and SunCoke Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
POSCO	$48.64 billion	0.30	$483.48 million	$2.64	18.37
SunCoke Energy	$1.84 billion	0.45	-$44.20 million	($0.65)	-14.90

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

About POSCO

POSCO Holdings Inc., together with its subsidiaries, operates as an integrated steel producer in Korea and internationally. It operates through six segments: Steel, Trading, Construction, Logistics and Others, Green Materials and Energy, and Others. The company engages in the production, import, sale, and export of steel products, such as hot and cold rolled steel, stainless steel, plates, wire rods, and silicon steel sheets, as well as pig iron, billets, blooms, and slabs; trading of steel and raw materials, textiles, agricultural commodities, and other goods; natural resources development and power generation activities; and planning, designing, and construction of industrial plants, civil engineering projects, and commercial and residential buildings. It is also involved in the manufacture and sale of various energy-related and other industrial materials, including anode and cathode materials for rechargeable batteries; investment business; and provision of alternative environmentally-friendly energy solutions, as well as information technology and operational technology, and integrated logistics services. POSCO Holdings Inc. was incorporated in 1968 and is based in Seoul, South Korea.

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.