Head to Head Review: Reliance (NYSE:RS) versus Teck Resources (NYSE:TECK)

Reliance (NYSE:RS) and Teck Resources (NYSE:TECK) are both large-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Volatility & Risk

Reliance has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Teck Resources has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Insider and Institutional Ownership

79.3% of Reliance shares are owned by institutional investors. Comparatively, 78.1% of Teck Resources shares are owned by institutional investors. 0.4% of Reliance shares are owned by insiders. Comparatively, 0.1% of Teck Resources shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Reliance and Teck Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reliance	5.42%	11.37%	7.77%
Teck Resources	14.91%	7.94%	4.62%

Valuation and Earnings

This table compares Reliance and Teck Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reliance	$14.29 billion	1.32	$739.40 million	$15.33	24.10
Teck Resources	$7.70 billion	4.06	$1.00 billion	$2.73	23.76

Teck Resources has lower revenue, but higher earnings than Reliance. Teck Resources is trading at a lower price-to-earnings ratio than Reliance, indicating that it is currently the more affordable of the two stocks.

Dividends

Reliance pays an annual dividend of $5.00 per share and has a dividend yield of 1.4%. Teck Resources pays an annual dividend of $0.37 per share and has a dividend yield of 0.6%. Reliance pays out 32.6% of its earnings in the form of a dividend. Teck Resources pays out 13.6% 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. Reliance has raised its dividend for 15 consecutive years. Reliance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Reliance and Teck Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reliance	1	6	1	0	2.00
Teck Resources	0	13	5	1	2.37

Reliance currently has a consensus price target of $344.67, suggesting a potential downside of 6.71%. Teck Resources has a consensus price target of $59.17, suggesting a potential downside of 8.79%. Given Reliance’s higher probable upside, equities research analysts plainly believe Reliance is more favorable than Teck Resources.

Summary

Reliance beats Teck Resources on 11 of the 18 factors compared between the two stocks.

About Reliance

Reliance, Inc. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was formerly known as Reliance Steel & Aluminum Co. and changed its name to Reliance, Inc. in February 2024. Reliance, Inc. was founded in 1939 and is based in Scottsdale, Arizona.

About Teck Resources

Teck Resources Limited engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. The company operates through Steelmaking Coal, Copper, Zinc, and Energy segments. Its principal products include copper, zinc, steelmaking coal, and blended bitumen. The company also produces lead, silver, and molybdenum; and various specialty and other metals, chemicals, and fertilizers. In addition, it explores for gold. The company was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in April 2009. The company was founded in 1913 and is headquartered in Vancouver, Canada.