Sims Metal Management (OTCMKTS:SMSMY) and Schnitzer Steel Industries (NASDAQ:SCHN) are both small-cap industrial products companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Institutional and Insider Ownership

0.0% of Sims Metal Management shares are owned by institutional investors. Comparatively, 91.1% of Schnitzer Steel Industries shares are owned by institutional investors. 3.8% of Schnitzer Steel Industries shares are owned by 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.

Valuation and Earnings

This table compares Sims Metal Management and Schnitzer Steel Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sims Metal Management $3.82 billion 0.48 $153.49 million N/A N/A
Schnitzer Steel Industries $2.36 billion 0.31 $156.45 million $5.39 5.13

Schnitzer Steel Industries has lower revenue, but higher earnings than Sims Metal Management.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sims Metal Management and Schnitzer Steel Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sims Metal Management 0 0 0 0 N/A
Schnitzer Steel Industries 1 1 1 0 2.00

Schnitzer Steel Industries has a consensus target price of $32.33, indicating a potential upside of 16.85%. Given Schnitzer Steel Industries’ higher possible upside, analysts plainly believe Schnitzer Steel Industries is more favorable than Sims Metal Management.

Profitability

This table compares Sims Metal Management and Schnitzer Steel Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sims Metal Management N/A N/A N/A
Schnitzer Steel Industries 6.62% 23.08% 13.28%

Dividends

Sims Metal Management pays an annual dividend of $0.39 per share and has a dividend yield of 4.3%. Schnitzer Steel Industries pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Schnitzer Steel Industries pays out 13.9% of its earnings in the form of a dividend.

Risk & Volatility

Sims Metal Management has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Schnitzer Steel Industries has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Summary

Schnitzer Steel Industries beats Sims Metal Management on 8 of the 13 factors compared between the two stocks.

Sims Metal Management Company Profile

Sims Metal Management Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals. The company operates through five segments: North America Metals, Investment in SA Recycling, Australia/New Zealand, Metals, Europe Metals, and Global E-Recycling. It is involved in the collection, processing, and trading of iron and steel secondary raw materials; and other metal alloys and residues, principally aluminum, lead, copper, zinc, and nickel bearing materials. The company also engages in the provision of environmentally responsible solutions for the disposal of post-consumer electronic products, including IT assets recycled for commercial customers; and environmentally responsible recycling of negative value materials, such as refrigerators, and other electrical and electronic equipment. In addition, it provides secondary processing and other services comprising the melting, refining, and ingoting of non-ferrous metals and others. The company was formerly known as Sims Group Limited and changed its name to Sims Metal Management Limited in November 2008. Sims Metal Management Limited was founded in 1917 and is headquartered in Rye, New York.

Schnitzer Steel Industries Company Profile

Schnitzer Steel Industries, Inc. recycles ferrous and nonferrous scrap metals; and manufactures finished steel products worldwide. It operates through two segments, Auto and Metals Recycling (AMR); and Cascade Steel and Scrap (CSS). The AMR segment buys, collects, processes, recycles, sells, and brokers scrap metals, as well as processes mixed and large pieces of scrap metal into smaller pieces by crushing, torching, shearing, shredding, and sorting. This segment offers ferrous scrap metal, a feedstock used in the production of finished steel products; and nonferrous products, including aluminum, copper, stainless steel, nickel, brass, titanium, lead, high temperature alloys, and joint products. It sells ferrous and nonferrous recycled metal products to steel mills, foundries, and smelters. This segment also procures salvaged vehicles and sells serviceable used auto parts from these vehicles through its 53 self-service auto parts stores in the United States and Western Canada, as well as sells auto bodies and parts containing ferrous and nonferrous materials, such as engines, transmissions, and alternators to wholesalers. The CSS segment produces various finished steel products using recycled metal and other raw materials. It offers semi-finished goods, which include billets; and finished goods consisting of rebar, coiled rebar, wire rods, merchant bars, and other specialty products. This segment serves steel service centers, construction industry subcontractors, steel fabricators, wire drawers, and farm and wood products suppliers. Schnitzer Steel Industries, Inc. was founded in 1906 and is headquartered in Portland, Oregon.

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