Reviewing Lawson Products (LAWS) and Reliance Steel & Aluminum (RS)
Lawson Products (NASDAQ: LAWS) and Reliance Steel & Aluminum (NYSE:RS) are both industrial products companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.
Insider & Institutional Ownership
64.8% of Lawson Products shares are held by institutional investors. Comparatively, 82.7% of Reliance Steel & Aluminum shares are held by institutional investors. 18.2% of Lawson Products shares are held by insiders. Comparatively, 3.2% of Reliance Steel & Aluminum shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This is a summary of recent ratings for Lawson Products and Reliance Steel & Aluminum, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Reliance Steel & Aluminum||0||3||7||0||2.70|
Lawson Products presently has a consensus target price of $30.00, suggesting a potential upside of 8.50%. Reliance Steel & Aluminum has a consensus target price of $89.17, suggesting a potential downside of 0.49%. Given Lawson Products’ higher probable upside, analysts plainly believe Lawson Products is more favorable than Reliance Steel & Aluminum.
Volatility & Risk
Lawson Products has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500. Comparatively, Reliance Steel & Aluminum has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.
Reliance Steel & Aluminum pays an annual dividend of $2.00 per share and has a dividend yield of 2.2%. Lawson Products does not pay a dividend. Reliance Steel & Aluminum pays out 24.0% of its earnings in the form of a dividend. Lawson Products has raised its dividend for 7 consecutive years.
Earnings and Valuation
This table compares Lawson Products and Reliance Steel & Aluminum’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lawson Products||$305.91 million||0.80||$29.68 million||$3.24||8.53|
|Reliance Steel & Aluminum||$9.72 billion||0.67||$613.40 million||$8.33||10.76|
Reliance Steel & Aluminum has higher revenue and earnings than Lawson Products. Lawson Products is trading at a lower price-to-earnings ratio than Reliance Steel & Aluminum, indicating that it is currently the more affordable of the two stocks.
This table compares Lawson Products and Reliance Steel & Aluminum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Reliance Steel & Aluminum||6.31%||9.00%||5.14%|
Reliance Steel & Aluminum beats Lawson Products on 9 of the 17 factors compared between the two stocks.
Lawson Products Company Profile
Lawson Products, Inc. is a distributor of products and services the industrial, commercial, institutional and government maintenance, repair and operations (MRO) market. The Company’s product categories include fastening systems, fluid power, specialty chemicals, cutting tools and abrasives, electrical, aftermarket automotive supplies, safety, welding and metal repair, and other. The Company supplies a range of automotive products, including body hardware, body shop, brake/wheel, fleet/truck, repair harness assembly and other parts. The Company offers approximately 200,000 different core products for sale of which approximately 50,000 products are maintained in its distribution centers. The Company’s customers operate in a range of industries, including automotive repair, commercial vehicle maintenance, government, manufacturing, food processing, distribution, construction, oil and gas, mining, wholesale and service.
Reliance Steel & Aluminum Company Profile
Reliance Steel & Aluminum Co. is a metals service center company in North America (the United States and Canada). As of December 31, 2016, the Company’s network of metals service centers operated over 300 locations in 39 states in the United States and in 12 other countries (Australia, Belgium, Canada, China, France, Malaysia, Mexico, Singapore, South Korea, Turkey, the United Arab Emirates and the United Kingdom). As of December 31, 2016, it provided metals processing services and distributes a range of more than 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium and specialty steel products in a range of industries. Its various metals service centers process and distribute only specialty metals. It delivers a range of products from facilities located across the United States and Canada. It provides a range of processing services for its customers’ and delivers products to fabricators, manufacturers and other end users.
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