Mechel PAO (NYSE: MTL) and Northwest Pipe (NASDAQ:NWPX) are both small-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Risk and Volatility

Mechel PAO has a beta of -1.18, meaning that its stock price is 218% less volatile than the S&P 500. Comparatively, Northwest Pipe has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500.

Earnings and Valuation

This table compares Mechel PAO and Northwest Pipe’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mechel PAO $9.52 billion 0.11 $2.49 billion N/A N/A
Northwest Pipe $138.62 million 1.39 -$4.17 million $0.06 334.17

Mechel PAO has higher revenue and earnings than Northwest Pipe.

Profitability

This table compares Mechel PAO and Northwest Pipe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mechel PAO N/A N/A N/A
Northwest Pipe 0.45% -1.90% -1.65%

Institutional & Insider Ownership

8.3% of Mechel PAO shares are owned by institutional investors. Comparatively, 83.4% of Northwest Pipe shares are owned by institutional investors. 36.3% of Mechel PAO shares are owned by company insiders. Comparatively, 2.0% of Northwest Pipe shares are owned by company 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.

Analyst Recommendations

This is a summary of current ratings and price targets for Mechel PAO and Northwest Pipe, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mechel PAO 1 0 0 0 1.00
Northwest Pipe 0 1 0 0 2.00

Northwest Pipe has a consensus price target of $9.00, indicating a potential downside of 55.11%. Given Northwest Pipe’s stronger consensus rating and higher probable upside, analysts plainly believe Northwest Pipe is more favorable than Mechel PAO.

Summary

Northwest Pipe beats Mechel PAO on 7 of the 12 factors compared between the two stocks.

About Mechel PAO

Mechel PAO, formerly Mechel OAO, is a holding company. The Company operates in the mining, steel and power industry segments. Its segments include Steel segment, comprising production and sales of semi-finished steel products, carbon and specialty long products, carbon and stainless flat products, and value-added downstream metal products, including forgings, stampings, and hardware, and ferrosilicon; Mining segment, comprising production and sales of coal (coking and steam), and middlings, coke and chemical products, and iron ore, which supplies raw materials to the Steel and Power segments, and also sells raw materials to third parties, and Power segment, comprising generation and sales of electricity and heat power, which supplies electricity and heat power to the Steel and Mining segments, and also sells a portion of electricity and heat power to third parties. It has freight seaports in Russia on the Sea of Japan and on the Sea of Azov, and a freight river port on the Kama River.

About Northwest Pipe

Northwest Pipe Company is a manufacturer of engineered steel pipe water systems. The Company operates through two segments. The Water Transmission segment produces steel pipeline systems for use in drinking water infrastructure, and has approximately eight manufacturing facilities, located in Portland, Oregon; Denver, Colorado; Adelanto, California; Parkersburg, West Virginia; Saginaw, Texas; St. Louis, Missouri; Salt Lake City, Utah, and Monterrey, Mexico. The Tubular Products segment produces steel line pipe products for energy applications, and has a manufacturing facility located in Atchison, Kansas. The Company, through Water Transmission Group, produces engineered welded steel pipe products for use in water transmission applications. It also manufactures smaller diameter electric resistance welded (ERW) steel pipe through its Tubular Products Group. The Company’s solutions-based products are used in water transmission, plant piping, tunnels and river crossings applications.

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