National Steel (NYSE:SID – Get Free Report) and Aperam (OTCMKTS:APEMY – Get Free Report) are both mid-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.
Dividends
National Steel pays an annual dividend of $0.09 per share and has a dividend yield of 5.4%. Aperam pays an annual dividend of $1.97 per share and has a dividend yield of 5.4%. National Steel pays out -31.0% of its earnings in the form of a dividend. Aperam pays out 68.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. National Steel is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares National Steel and Aperam”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National Steel | $44.69 billion | 0.05 | -$480.53 million | ($0.29) | -5.74 |
| Aperam | $6.77 billion | 0.40 | $249.96 million | $2.89 | 12.67 |
Aperam has lower revenue, but higher earnings than National Steel. National Steel is trading at a lower price-to-earnings ratio than Aperam, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares National Steel and Aperam’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National Steel | -5.06% | -13.90% | -2.21% |
| Aperam | 3.11% | 1.72% | 0.92% |
Analyst Recommendations
This is a summary of current ratings for National Steel and Aperam, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Steel | 2 | 1 | 0 | 0 | 1.33 |
| Aperam | 0 | 3 | 0 | 0 | 2.00 |
National Steel presently has a consensus price target of $1.30, indicating a potential downside of 21.92%. Given National Steel’s higher possible upside, equities research analysts clearly believe National Steel is more favorable than Aperam.
Risk and Volatility
National Steel has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Aperam has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500.
Summary
Aperam beats National Steel on 8 of the 13 factors compared between the two stocks.
About National Steel
Companhia Siderúrgica Nacional operates as an integrated steel producer in Brazil and Latin America. It operates through five segments: Steel Industry, Mining, Logistics, Energy, and Cement. The company offers flat steel products, such as hot and cold rolled, galvanized, galvalume, pre-painted, and metal sheets products; coil, sheets, and derivatives; tiles and derivatives, pipes, and profiles; long steel products; steel packaging solutions for the food industry; chemical packaging solution; and carbochemical products. It also provides steel cutting services; produces and sells cement; operates railway and port facilities; and generates electric power from its thermoelectric co-generation and hydroelectric power plants. In addition, the company explores for iron ore reserves at Casa de Pedra and Engenho mines located in the city of Congonhas; and limestone and dolomite at the Bocaina mine located in the city of Arcos in the state of Minas Gerais, Brazil, as well as produces tin. Companhia Siderúrgica Nacional was founded in 1941 and is headquartered in São Paulo, Brazil.
About Aperam
Aperam S.A., together with its subsidiaries, produces and sells stainless and specialty steel products worldwide. It operates through four segments: Stainless & Electrical Steel; Services & Solutions; Alloys & Specialties; and Recycling & Renewables. The company offers a range of stainless steel products, including grain oriented and non-grain oriented electrical steel products, and specialty alloys. It is also involved in the management of direct sales of stainless steel products from production facilities; distribution of its products; and the provision of transformation services that include value added and customized steel solutions. In addition, the company designs, produces, and transforms various specialty alloys and other specific stainless steels in forms, such as bars, semis, cold-rolled strips, wire and wire rods, and plates in a range on grades. Further, it engages in the trading, processing, and recycling of raw materials, such as superalloys and titanium; provides Recyco, an electric arc furnace recycling facility that retrieves dust and sludge to recycle stainless steel raw materials and reduce waste; and produces wood and charcoal from cultivated eucalyptus forests. The company serves customers in aerospace, automotive, catering, construction, household appliances, electrical engineering, industrial processes, medical, and oil and gas industries. It distributes its products through a network of steel service centers, transformation facilities, and sales offices. The company was incorporated in 2010 and is headquartered in Luxembourg, Luxembourg.
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