Critical Analysis: Universal Stainless & Alloy Products (USAP) & Timken Steel Corporation (TMST)
Universal Stainless & Alloy Products (NASDAQ: USAP) and Timken Steel Corporation (NYSE:TMST) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.
This table compares Universal Stainless & Alloy Products and Timken Steel Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Universal Stainless & Alloy Products||-1.20%||-0.91%||-0.55%|
|Timken Steel Corporation||-8.13%||-14.32%||-7.91%|
Risk and Volatility
Universal Stainless & Alloy Products has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Timken Steel Corporation has a beta of 2.26, indicating that its share price is 126% more volatile than the S&P 500.
Institutional & Insider Ownership
83.5% of Universal Stainless & Alloy Products shares are owned by institutional investors. Comparatively, 75.6% of Timken Steel Corporation shares are owned by institutional investors. 11.6% of Universal Stainless & Alloy Products shares are owned by company insiders. Comparatively, 8.1% of Timken Steel Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Universal Stainless & Alloy Products and Timken Steel Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Universal Stainless & Alloy Products||$175.29 million||0.75||$17.87 million||($0.29)||-62.52|
|Timken Steel Corporation||$1.08 billion||0.61||-$29.80 million||($1.99)||-7.45|
Universal Stainless & Alloy Products has higher revenue, but lower earnings than Timken Steel Corporation. Universal Stainless & Alloy Products is trading at a lower price-to-earnings ratio than Timken Steel Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Universal Stainless & Alloy Products and Timken Steel Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Universal Stainless & Alloy Products||0||0||2||0||3.00|
|Timken Steel Corporation||0||2||1||0||2.33|
Universal Stainless & Alloy Products currently has a consensus target price of $19.00, suggesting a potential upside of 4.80%. Timken Steel Corporation has a consensus target price of $19.75, suggesting a potential upside of 33.18%. Given Timken Steel Corporation’s higher possible upside, analysts plainly believe Timken Steel Corporation is more favorable than Universal Stainless & Alloy Products.
Universal Stainless & Alloy Products beats Timken Steel Corporation on 10 of the 13 factors compared between the two stocks.
Universal Stainless & Alloy Products Company Profile
Universal Stainless & Alloy Products, Inc. manufactures and markets semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. The Company’s manufacturing process involves melting, remelting, heat treating, hot and cold rolling, forging, machining and cold drawing of semi-finished and finished specialty steels. The Company also performs conversion services on materials supplied by customers. The Company’s manufacturing locations include Bridgeville and Titusville, Pennsylvania; Dunkirk, New York, and North Jackson, Ohio. The Company produce a range of specialty steel grades using several manufacturing processes, including argon oxygen decarburization (AOD), electro-slag remelted (ESR), vacuum induction melting (VIM) and vacuum-arc remelted (VAR). It manufactures its products within the product lines, including Stainless Steel, High-Strength Low Alloy Steel, Tool Steel and High-Temperature Alloy Steel.
Timken Steel Corporation Company Profile
TimkenSteel Corporation manufactures alloy steel, as well as carbon and micro-alloy steel. The Company’s portfolio includes special bar quality (SBQ) bars, seamless mechanical tubing and precision steel components. In addition, the Company supplies machining and thermal treatment services, as well as manage raw material recycling programs, which are used as a feeder system for its melt operations. The Company’s products include SBQ Steel and Seamless Mechanical Steel Tubing, and Value-added Precision Products and Services. Its focus is on alloy steel. The Company manufactures carbon, micro-alloy and alloy steel, sold as ingots, bars and tubes. In addition to its customized steels, the Company also manufactures custom-make precision components. Its products and services are used in a range of demanding applications in the market sectors, such as oil and gas, industrial equipment, mining and power generation.
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