Reviewing Teck Resources (NYSE:TECK) and Olympic Steel (NASDAQ:ZEUS)

Olympic Steel (NASDAQ:ZEUS) and Teck Resources (NYSE:TECK) are both materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Olympic Steel and Teck Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Olympic Steel	0.73%	2.11%	1.14%
Teck Resources	17.85%	10.42%	6.07%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Olympic Steel and Teck Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Olympic Steel	0	1	0	0	2.00
Teck Resources	0	7	6	0	2.46

Teck Resources has a consensus price target of $68.80, suggesting a potential upside of 16.80%. Given Teck Resources’ stronger consensus rating and higher possible upside, analysts plainly believe Teck Resources is more favorable than Olympic Steel.

Earnings and Valuation

This table compares Olympic Steel and Teck Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Olympic Steel	$1.90 billion	0.28	$22.98 million	$1.17	40.91
Teck Resources	$7.70 billion	3.70	$1.00 billion	$3.69	15.96

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

Volatility & Risk

Olympic Steel has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500. Comparatively, Teck Resources has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Dividends

Olympic Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. Teck Resources pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. Olympic Steel pays out 54.7% of its earnings in the form of a dividend. Teck Resources pays out 9.8% 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. Olympic Steel has raised its dividend for 4 consecutive years. Olympic Steel is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

87.1% of Olympic Steel shares are owned by institutional investors. Comparatively, 78.1% of Teck Resources shares are owned by institutional investors. 13.8% of Olympic Steel shares are owned by insiders. Comparatively, 0.1% of Teck Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Teck Resources beats Olympic Steel on 11 of the 17 factors compared between the two stocks.

About Olympic Steel

Olympic Steel, Inc. processes, distributes, and stores metal products primarily in the United States, Canada, and Mexico. It operates in three segments: Carbon Flat Products; Specialty Metals Flat Products; and Tubular and Pipe Products. The company offers stainless steel and aluminum coil and sheet products, angles, rounds, and flat bars; alloy, heat treated, and abrasion resistant coils, sheets and plates; coated metals, including galvanized, galvannealed, electro galvanized, advanced high strength steels, aluminized, and automotive grades of steel; commercial quality, advanced high strength steel, drawing steel, and automotive grades cold rolled steel coil and sheet products; hot rolled carbon comprising hot rolled coil, pickled and oiled sheet and plate steel products, automotive grades, advanced high strength steels, and high strength low alloys; tube, pipe, and bar products, including round, square, and rectangular mechanical and structural tubing; hydraulic and stainless tubing; boiler tubing; carbon, stainless, and aluminum pipes; valves and fittings; and tin mill products, such as electrolytic tinplate, electrolytic chromium coated steel, and black plates. The company also provides cutting-to-length, slitting, shearing, blanking, tempering, stretcher-leveling, plate and laser processing, forming and machining, tube processing, finishing, and fabrication services, as well as value-added services, such as saw cutting, laser cutting, beveling, threading, and grooving services. It serves metal consuming industries, such as manufacturers and fabricators of transportation and material handling lift equipment, construction, mining and farm equipment, agriculture equipment, storage tanks, environmental and energy generation equipment, automobiles, food service, and electrical equipment, as well as general and plate fabricators, and metals service centers through direct sales force. Olympic Steel, Inc. was founded in 1954 and is based in Highland Hills, Ohio.

About Teck Resources

Teck Resources Limited engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. The company operates through Steelmaking Coal, Copper, Zinc, and Energy segments. Its principal products include copper, zinc, steelmaking coal, and blended bitumen. The company also produces lead, silver, and molybdenum; and various specialty and other metals, chemicals, and fertilizers. In addition, it explores for gold. The company was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in April 2009. The company was founded in 1913 and is headquartered in Vancouver, Canada.