Nucor (NYSE:NUE) vs. Voestalpine (OTCMKTS:VLPNY) Critical Analysis

Voestalpine (OTCMKTS:VLPNY) and Nucor (NYSE:NUE) are both materials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Voestalpine	3.39%	6.66%	3.30%
Nucor	7.99%	12.73%	8.03%

Risk & Volatility

Voestalpine has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Nucor has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Voestalpine	0	3	3	0	2.50
Nucor	0	3	13	0	2.81

Nucor has a consensus price target of $274.38, suggesting a potential upside of 5.23%. Given Nucor’s stronger consensus rating and higher possible upside, analysts plainly believe Nucor is more favorable than Voestalpine.

Dividends

Voestalpine pays an annual dividend of $0.09 per share and has a dividend yield of 0.9%. Nucor pays an annual dividend of $2.24 per share and has a dividend yield of 0.9%. Voestalpine pays out 12.9% of its earnings in the form of a dividend. Nucor pays out 17.9% 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. Voestalpine is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

76.5% of Nucor shares are held by institutional investors. 0.6% of Nucor shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Voestalpine and Nucor”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Voestalpine	$17.47 billion	0.51	$492.57 million	$0.70	14.83
Nucor	$32.49 billion	1.82	$1.74 billion	$12.54	20.79

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

Summary

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

About Voestalpine

Voestalpine AG processes, develops, manufactures, and sells steel products in Austria, European Union, and internationally. The company operates through five segments: Steel, High Performance Metals, Metal Engineering, Metal Forming, and Other. The Steel division produces hot and cold-rolled steel strips, as well as electrogalvanized, hot-dip galvanized, and organically coated steel strips; and heavy plates for the energy sector, as well as turbine casings for automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The High Performance Metals segment offers special alloys for the oil and natural gas, aerospace, and energy engineering industries; tool manufacturing, component processing, heat treatment, and coating services; and warehousing and preprocessing of special steels, as well as services, including logistics, distribution, and processing for the oil and natural gas industries for automotive, white goods/consumer goods, building/construction, aerospace, mechanical engineering, and others. The Metal Engineering division offers rails and turnout products, rod and drawn wires, seamless tubes, and welding consumables and machinery; rails and digital monitoring systems; and services for rail infrastructure. This segment serves railway systems, automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The Metal Forming division manufactures special tubes and sections, and precision strip steel products, as well as pre-finished system components made from pressed, stamped, and roll-profiled parts for use in automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The company is headquartered in Linz, Austria.

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.