Head-To-Head Review: Ryerson (NYSE:RYZ) and Global Industrial (NYSE:GIC)

Global Industrial (NYSE:GIC) and Ryerson (NYSE:RYZ) are both small-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Earnings & Valuation

This table compares Global Industrial and Ryerson”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Industrial	$1.38 billion	1.24	$72.10 million	$2.24	20.06
Ryerson	$5.84 billion	0.25	-$56.40 million	($1.24)	-22.67

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

Profitability

This table compares Global Industrial and Ryerson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Industrial	6.06%	21.49%	11.60%
Ryerson	-0.56%	-0.62%	-0.21%

Analyst Ratings

This is a summary of recent ratings and target prices for Global Industrial and Ryerson, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Industrial	0	3	0	0	2.00
Ryerson	1	2	0	0	1.67

Global Industrial presently has a consensus price target of $39.00, indicating a potential downside of 13.21%. Given Global Industrial’s stronger consensus rating and higher probable upside, analysts clearly believe Global Industrial is more favorable than Ryerson.

Institutional & Insider Ownership

31.2% of Global Industrial shares are held by institutional investors. Comparatively, 94.8% of Ryerson shares are held by institutional investors. 64.5% of Global Industrial shares are held by company insiders. Comparatively, 6.6% of Ryerson shares are held 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.

Volatility & Risk

Global Industrial has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Ryerson has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.

Dividends

Global Industrial pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Ryerson pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Global Industrial pays out 50.0% of its earnings in the form of a dividend. Ryerson pays out -60.5% 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. Global Industrial has increased its dividend for 9 consecutive years. Ryerson is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Global Industrial beats Ryerson on 11 of the 16 factors compared between the two stocks.

About Global Industrial

Global Industrial Company operates as an industrial distributor of various industrial and maintenance, repair, and operation (MRO) products in North America. It offers storage and shelving, safety and security, carts and trucks, HVAC and fans, furniture and decor, material handling, janitorial and facility maintenance, workbenches and shop desks, tools and instruments, plumbing and pumps, office and school supplies, packaging and shipping, lighting and electrical, foodservice and retail, medical and laboratory, motors and power transmission, building supplies, machining, fasteners and hardware, vehicle maintenance, and raw materials. The company offers industrial and MRO products under the Global, GlobalIndustrial.com, Nexel, Paramount, Interion, and Absocold trademarks. It serves businesses; state, local, and private educational organizations; and government entities through relationship marketers, e-commerce sites, signature campaigns, and catalogs. The company was formerly known as Systemax Inc. Global Industrial Company was founded in 1949 and is headquartered in Port Washington, New York.

About Ryerson

Ryerson Holding Corporation, together with its subsidiaries, processes and distributes industrial metals in the United States, Canada, Mexico, and China. It offers a line of products in carbon steel, stainless steel, alloy steels, and aluminum, as well as nickel and red metals in various shapes and forms, including coils, sheets, rounds, hexagons, square and flat bars, plates, structural, and tubing. The company also provides various processing services, such as bending, beveling, blanking, blasting, burning, cutting-to-length, drilling, embossing, flattening, forming, grinding, laser cutting, machining, notching, painting, perforating, polishing, punching, rolling, sawing, scribing, shearing, slitting, stamping, tapping, threading, welding, or other techniques to process materials. It serves various industries, including commercial ground transportation, metal fabrication and machine shops, industrial machinery and equipment manufacturing, consumer durable equipment, HVAC manufacturing, construction equipment manufacturing, food processing and agricultural equipment manufacturing, and oil and gas. The company was founded in 1842 and is headquartered in Chicago, Illinois.