ArcelorMittal (NYSE: MT) and Synalloy Corporation (NASDAQ:SYNL) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitabiliy, risk and dividends.

Volatility & Risk

ArcelorMittal has a beta of 2.09, indicating that its stock price is 109% more volatile than the S&P 500. Comparatively, Synalloy Corporation has a beta of 0.15, indicating that its stock price is 85% less volatile than the S&P 500.

Valuation & Earnings

This table compares ArcelorMittal and Synalloy Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ArcelorMittal $61.98 billion 0.45 $7.47 billion $3.33 8.12
Synalloy Corporation $144.46 million 0.66 $3.34 million ($0.58) -18.92

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

Insider and Institutional Ownership

9.7% of ArcelorMittal shares are held by institutional investors. Comparatively, 47.4% of Synalloy Corporation shares are held by institutional investors. 0.1% of ArcelorMittal shares are held by insiders. Comparatively, 10.6% of Synalloy Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares ArcelorMittal and Synalloy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ArcelorMittal 5.50% 10.52% 4.58%
Synalloy Corporation -3.45% -1.56% -0.97%

Analyst Recommendations

This is a breakdown of recent recommendations for ArcelorMittal and Synalloy Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArcelorMittal 1 1 12 0 2.79
Synalloy Corporation 0 0 0 0 N/A

ArcelorMittal currently has a consensus target price of $31.90, suggesting a potential upside of 17.99%. Given ArcelorMittal’s higher possible upside, equities analysts clearly believe ArcelorMittal is more favorable than Synalloy Corporation.

Summary

ArcelorMittal beats Synalloy Corporation on 9 of the 12 factors compared between the two stocks.

ArcelorMittal Company Profile

ArcelorMittal S.A. (ArcelorMittal) is a holding company. The Company, together with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia and Africa. ArcelorMittal operates through five segments, which include NAFTA; Europe; Brazil; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA segment produces flat, long and tubular products. The Brazil segment includes the flat operations of Brazil, and the long and tubular operations of Brazil and neighboring countries. The Europe segment is the flat steel producer in Europe. The ACIS segment produces a combination of flat, long products and tubular products. The Mining segment comprises all mines owned by ArcelorMittal in the Americas, Asia, Europe and Africa. It produces a range of finished and semi-finished steel products (semis).

Synalloy Corporation Company Profile

Synalloy Corporation is a chemical manufacturing company. The Company operates through two segments: the Metals Segment and the Specialty Chemicals Segment. The Company’s Metals Segment comprises three subsidiaries: Synalloy Metals, Inc., which owns Bristol Metals, LLC (BRISMET), located in Bristol, Tennessee; Palmer of Texas Tanks, Inc. (Palmer), located in Andrews, Texas; and Specialty Pipe & Tube, Inc. (Specialty), located in Mineral Ridge, Ohio and Houston, Texas. The Company’s Metals Segment manufactures stainless steel, other alloy pipe, storage solutions and separation equipment. The Company’s Specialty Chemicals segment consists of the Company’s subsidiary, Manufacturers Soap and Chemical Company (MS&C). The Specialty Chemicals Segment manufactures lubricants, surfactants, reaction intermediaries, sulfated fats and oils, and chemical tolling manufacturing resources.

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