Outokumpu (OTCMKTS:OUTKY) and Nucor (NYSE:NUE) Head-To-Head Contrast

Nucor (NYSE:NUE) and Outokumpu (OTCMKTS:OUTKY) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Volatility & Risk

Nucor has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, Outokumpu has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Insider and Institutional Ownership

76.5% of Nucor shares are owned by institutional investors. 0.5% of Nucor shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Nucor pays an annual dividend of $2.20 per share and has a dividend yield of 1.6%. Outokumpu pays an annual dividend of $0.04 per share and has a dividend yield of 1.8%. Nucor pays out 39.7% of its earnings in the form of a dividend. Outokumpu pays out -80.0% 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. Nucor has raised its dividend for 52 consecutive years. Outokumpu is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Nucor and Outokumpu”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nucor	$30.81 billion	1.00	$2.03 billion	$5.54	24.13
Outokumpu	$6.43 billion	0.33	-$43.28 million	($0.05)	-45.40

Nucor has higher revenue and earnings than Outokumpu. Outokumpu is trading at a lower price-to-earnings ratio than Nucor, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Nucor and Outokumpu, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nucor	0	2	8	0	2.80
Outokumpu	2	1	1	0	1.75

Nucor presently has a consensus price target of $156.60, suggesting a potential upside of 17.15%. Given Nucor’s stronger consensus rating and higher probable upside, analysts clearly believe Nucor is more favorable than Outokumpu.

Profitability

This table compares Nucor and Outokumpu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nucor	4.21%	6.65%	4.15%
Outokumpu	-0.82%	-1.33%	-0.82%

Summary

Nucor beats Outokumpu on 15 of the 17 factors compared between the two stocks.

About Nucor

Nucor Corporation engages in manufacture and sale of steel and steel products. It operates in three segments: steel mills, steel products, and raw materials. The Steel Mills segment produces hot-rolled, cold-rolled, and galvanized sheet steel products; plate steel products; wide-flange beams, beam blanks, and H-piling and sheet piling structural steel products; bar steel products, such as blooms, billets, concrete reinforcing and merchant bars, and engineered special bar quality products; and engages in the steel trading and rebar distribution businesses. This segment sells its products to steel service centers, fabricators, and manufacturers in the United States, Canada, and Mexico. The Steel Products segment offers steel joists and joist girders, steel decks, and galvanized torque tubes for used in solar arrays, hollow structural section steel tubing, electrical conduit, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, steel grating and expanded metal, wire and wire mesh, metal building systems, insulated metal panels, steel racking, overhead doors, and utility towers and structures for communications and energy transmission. This segment is also involved in the piling distribution business. The Raw Materials segment produces direct reduced iron (DRI); brokers ferrous and nonferrous metals, pig iron, hot briquetted iron, and DRI; supplies ferro-alloys; processes ferrous and nonferrous scrap metal; and engages in the natural gas production and industrial gas business. This segment sells its ferrous scrap to electric arc furnace steel mills and foundries for manufacturing process; and nonferrous scrap metal to aluminum can producers, secondary aluminum smelters, steel mills and other processors, and consumers of various nonferrous metals. It markets its products through in-house sales force; and internal distribution and trading companies. Nucor Corporation was founded in 1905 and is headquartered in Charlotte, North Carolina.

About Outokumpu

Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally. The company operates through three segments: Europe, Americas, and Ferrochrome. It offers cold rolled coils, strips, and sheets; hot rolled coils, strips, and plates; quarto plates; precision strips; and specialized components, such as welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, hardened and customized press plates, suction roll shells, and blancs and disks. The company also provides stainless steel powder which includes Supra 316L, Dura 17-4PH, Ultra 904L, Therma 253MA, Dura 4116, and Ni-free austenitic stainless steel powder; and nickel-based alloys. Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy; marine; and heavy industries. The company was founded in 1910 and is headquartered in Helsinki, Finland.