Contrasting China Precision Steel (CPSL) & Steel Dynamics (STLD)

Steel Dynamics (NASDAQ:STLD) and China Precision Steel (OTCMKTS:CPSL) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Steel Dynamics and China Precision Steel, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Steel Dynamics 0 2 9 0 2.82
China Precision Steel 0 0 0 0 N/A

Steel Dynamics currently has a consensus target price of $50.36, suggesting a potential upside of 50.79%.

Dividends

Steel Dynamics pays an annual dividend of $0.75 per share and has a dividend yield of 2.2%. China Precision Steel does not pay a dividend. Steel Dynamics pays out 28.3% of its earnings in the form of a dividend. Steel Dynamics has raised its dividend for 6 consecutive years.

Earnings and Valuation

This table compares Steel Dynamics and China Precision Steel’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Steel Dynamics $9.54 billion 0.80 $812.74 million $2.65 12.60
China Precision Steel N/A N/A N/A N/A N/A

Steel Dynamics has higher revenue and earnings than China Precision Steel.

Institutional and Insider Ownership

83.8% of Steel Dynamics shares are owned by institutional investors. 4.4% of Steel Dynamics shares are owned by insiders. Comparatively, 0.4% of China Precision Steel shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Steel Dynamics and China Precision Steel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Steel Dynamics 11.49% 31.96% 15.33%
China Precision Steel N/A N/A N/A

Summary

Steel Dynamics beats China Precision Steel on 9 of the 10 factors compared between the two stocks.

About Steel Dynamics

Steel Dynamics, Inc. is a diversified carbon-steel steel producer and metals recycler in the U.S. It produces a wide array of steel – beams, bars, steel sheet, and more. It operates through the following segments: Steel Operations, Metals Recycling Operations, Steel Fabrication Operations, and Others. The Steel Operations segment consist of its electric arc furnace mini-mills, producing steel from steel scrap, utilizing continuous casting, automated rolling mills, and various downstream finishing facilities. The Metals Recycling Operations segment primarily includes its metals recycling operations, liquid pig iron production facility, and Minnesota iron operations. The Steel Fabrication Operations segment includes New Millennium Building Systems plants, which fabricate steel joists, trusses, girders, and decking used within the non-residential construction industry. The company was founded by Keith E. Busse, Mark D. Millett, Richard P. Teets and John C. Bates in August 1993 and is headquartered in Fort Wayne, IN.

About China Precision Steel

China Precision Steel, Inc., a steel processing company, manufactures and sells cold-rolled precision steel products. It produces and sells precision cold-rolled steel products ranging from 7.5 mm to 0.03 mm. The company's steel products comprise cold-rolled and hard-rolled low carbon steel products for steel roofing, food packaging, dry batteries, electronic devices, and kitchen tools; cold-rolled and hard-rolled high carbon steel products for automobile parts and components, grinding pieces, saw blades, and weaving needles; and tailor made cold rolled steel products. It also provides heat treatment, and cutting and slitting services for medium and high-carbon hot-rolled steel strips not exceeding 7.5 mm thickness. The company sells its products to component manufacturers and directly to the end-users in the People's Republic of China, Indonesia, Thailand, the Caribbean, Nigeria, Ethiopia, and Turkey. China Precision Steel, Inc. is headquartered in Sheung Wan, Hong Kong.

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