Wesfarmers (OTCMKTS:NPSCY) and Insteel Industries (NASDAQ:IIIN) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Valuation & Earnings

This table compares Wesfarmers and Insteel Industries’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wesfarmers $55.60 billion 0.16 $2.26 billion $2.54 3.75
Insteel Industries $455.71 million 0.60 $5.60 million N/A N/A

Wesfarmers has higher revenue and earnings than Insteel Industries.

Dividends

Wesfarmers pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. Insteel Industries pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. Wesfarmers pays out 4.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

0.0% of Wesfarmers shares are held by institutional investors. Comparatively, 80.5% of Insteel Industries shares are held by institutional investors. 5.1% of Insteel Industries shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Wesfarmers has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Insteel Industries has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500.

Profitability

This table compares Wesfarmers and Insteel Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wesfarmers -5.53% -9.49% -4.24%
Insteel Industries 0.45% 0.82% 0.67%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Wesfarmers and Insteel Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wesfarmers 0 1 0 0 2.00
Insteel Industries 0 0 1 0 3.00

Insteel Industries has a consensus price target of $19.00, suggesting a potential upside of 34.75%. Given Insteel Industries’ stronger consensus rating and higher possible upside, analysts plainly believe Insteel Industries is more favorable than Wesfarmers.

Summary

Insteel Industries beats Wesfarmers on 12 of the 15 factors compared between the two stocks.

About Wesfarmers

Nippon Steel Corporation, together with its subsidiaries, engages in steelmaking and steel fabrication, engineering and construction, chemicals and materials, and system solutions businesses in Japan and internationally. The Steelmaking and Steel Fabrication segment offers steel plates and sheets; bars, beams, shapes, and rods; pipes and tubes; railway, automotive, and machinery parts; and stainless steel and titanium. The Engineering and Construction segment plans, designs, and constructs various construction projects, including industrial plants, environmental and energy plants, civil engineering projects, and large steel structures, such as skyscrapers and oil and gas pipelines. This segment also involved in the manufacturing and sale of industrial machinery, and equipment and steel structures; and waste processing and recycling, and supplying of electricity, gas, and heat. The Chemicals and Materials segment produces and sells various materials, including coal-based chemical products, petrochemicals, electronic materials, and components for semiconductors and electronic parts, carbon fiber, and composite products, as well as products that apply technologies for metal processing. The System Solutions segment provides computer system engineering and consulting services, information technology outsourcing services, and other client-oriented information technology business solutions to customers in manufacturing and consumer products industries. The company serves automotive, energy and resources, construction, appliance, machinery, equipment, and transportation industries. The company was formerly known as Nippon Steel & Sumitomo Metal Corporation and changed its name to Nippon Steel Corporation in April 2019. Nippon Steel Corporation was founded in 1949 and is based in Tokyo, Japan.

About Insteel Industries

Insteel Industries, Inc., together with its subsidiaries, manufactures and markets steel wire reinforcing products for concrete construction applications. The company offers pre-stressed concrete strand (PC strand) and welded wire reinforcement (WWR) products. Its PC strand is a seven-wire strand that is used to impart compression forces into precast concrete elements and structures providing reinforcement for bridges, parking decks, buildings, and other concrete structures. The company's WWR engineered reinforcing product is used in nonresidential and residential construction. It produces a range of WWR products, such as engineered structural mesh, an engineered made-to-order product that is used as the primary reinforcement for concrete elements or structures serving as a reinforcing solution for hot-rolled rebar; concrete pipe reinforcement, an engineered made-to-order product that is used as the primary reinforcement in concrete pipe, box culverts, and precast manholes for drainage and sewage systems, water treatment facilities, and other related applications; and standard welded wire reinforcement, a secondary reinforcing product for crack control applications in residential and light nonresidential construction, including driveways, sidewalks, and various slab-on-grade applications. The company sells its products through sales representatives to the manufacturers of concrete products, distributors, rebar fabricators, and contractors primarily in the United States, as well as in Canada, Mexico, and Central and South America. Insteel Industries, Inc. was founded in 1953 and is headquartered in Mount Airy, North Carolina.

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