Reviewing Synalloy Corporation (SYNL) & POSCO (PKX)

Synalloy Corporation (NASDAQ: SYNL) and POSCO (NYSE:PKX) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Synalloy Corporation and POSCO, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synalloy Corporation 0 0 0 0 N/A
POSCO 0 2 2 0 2.50

Institutional and Insider Ownership

47.4% of Synalloy Corporation shares are held by institutional investors. Comparatively, 5.2% of POSCO shares are held by institutional investors. 10.6% of Synalloy Corporation shares are held by company insiders. Comparatively, 0.0% of POSCO shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Synalloy Corporation has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500. Comparatively, POSCO has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Dividends

Synalloy Corporation pays an annual dividend of $0.13 per share and has a dividend yield of 1.0%. POSCO pays an annual dividend of $0.55 per share and has a dividend yield of 0.8%. Synalloy Corporation pays out -100.0% of its earnings in the form of a dividend. POSCO pays out 9.9% 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. Synalloy Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Synalloy Corporation and POSCO’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Synalloy Corporation $138.57 million 0.83 -$7.09 million ($0.13) -101.15
POSCO $45.65 billion 0.50 $1.22 billion $5.58 12.69

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

Profitability

This table compares Synalloy Corporation and POSCO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Synalloy Corporation -0.59% 1.85% 1.03%
POSCO 3.60% 4.41% 2.78%

Summary

POSCO beats Synalloy Corporation on 8 of the 14 factors compared between the two stocks.

Synalloy Corporation Company Profile

Synalloy Corporation is a chemical manufacturing company. The Company operates through two segments: the Metals Segment and the Specialty Chemicals Segment. The Company’s Metals Segment comprises three subsidiaries: Synalloy Metals, Inc., which owns Bristol Metals, LLC (BRISMET), located in Bristol, Tennessee; Palmer of Texas Tanks, Inc. (Palmer), located in Andrews, Texas; and Specialty Pipe & Tube, Inc. (Specialty), located in Mineral Ridge, Ohio and Houston, Texas. The Company’s Metals Segment manufactures stainless steel, other alloy pipe, storage solutions and separation equipment. The Company’s Specialty Chemicals segment consists of the Company’s subsidiary, Manufacturers Soap and Chemical Company (MS&C). The Specialty Chemicals Segment manufactures lubricants, surfactants, reaction intermediaries, sulfated fats and oils, and chemical tolling manufacturing resources.

POSCO Company Profile

POSCO is a Korea-based company principally engaged in the manufacture and distribution of steel products. The Company operates in four segments: steel, trading, construction, and others. The steel segment includes production of steel products and sale of such products. The trading segment consists of global trading activities of POSCO Daewoo Corporation, exporting and importing a range of steel products that are both obtained from and supplied to it, as well as between other suppliers and purchasers in Korea and overseas. The construction segment includes planning, designing and construction of industrial plants, civil engineering projects, and commercial and residential buildings, both in Korea and overseas. The others segment includes power generation, liquefied natural gas (LNG) logistics, and network and system integration.

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