Head to Head Analysis: Commercial Metals (CMC) versus Carpenter Technology Corporation (CRS)

Commercial Metals (NYSE: CMC) and Carpenter Technology Corporation (NYSE:CRS) are both mid-cap basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Volatility & Risk

Commercial Metals has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Carpenter Technology Corporation has a beta of 2.09, suggesting that its share price is 109% more volatile than the S&P 500.

Profitability

This table compares Commercial Metals and Carpenter Technology Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Commercial Metals 0.95% 6.50% 2.89%
Carpenter Technology Corporation 4.06% 6.67% 2.77%

Dividends

Commercial Metals pays an annual dividend of $0.48 per share and has a dividend yield of 2.6%. Carpenter Technology Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.6%. Commercial Metals pays out 120.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Carpenter Technology Corporation pays out 44.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Commercial Metals and Carpenter Technology Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Commercial Metals 2 1 4 0 2.29
Carpenter Technology Corporation 0 3 3 0 2.50

Commercial Metals presently has a consensus price target of $21.14, indicating a potential upside of 15.28%. Carpenter Technology Corporation has a consensus price target of $46.60, indicating a potential upside of 1.77%. Given Commercial Metals’ higher possible upside, analysts clearly believe Commercial Metals is more favorable than Carpenter Technology Corporation.

Insider & Institutional Ownership

91.3% of Commercial Metals shares are held by institutional investors. Comparatively, 97.6% of Carpenter Technology Corporation shares are held by institutional investors. 1.3% of Commercial Metals shares are held by insiders. Comparatively, 4.5% of Carpenter Technology Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Commercial Metals and Carpenter Technology Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Commercial Metals $4.57 billion 0.46 $46.33 million $0.40 45.85
Carpenter Technology Corporation $1.80 billion 1.19 $47.00 million $1.62 28.27

Carpenter Technology Corporation has higher revenue, but lower earnings than Commercial Metals. Carpenter Technology Corporation is trading at a lower price-to-earnings ratio than Commercial Metals, indicating that it is currently the more affordable of the two stocks.

Summary

Carpenter Technology Corporation beats Commercial Metals on 11 of the 16 factors compared between the two stocks.

About Commercial Metals

Commercial Metals Company, together with its subsidiaries, manufactures, recycles and markets steel and metal products, related materials and services through a network. The Company’s Americas Recycling segment processes scrap metals for use as a raw material by manufacturers of new metal products. The Americas Mills segment consists of steel mills, commonly referred to as minimills that produce reinforcing bar (rebar), angles, flats and rounds. Its Americas Fabrication segment consists of its steel fabrication facilities that bend, weld, cut and fabricate steel, primarily rebar. Its International Mill segment consists of its mill, recycling and fabrication operations located in Poland. Its International Marketing and Distribution segment includes international operations for the sales, distribution and processing of primary and secondary metals, fabricated metals, semi-finished, long and flat steel products, and other industrial products.

About Carpenter Technology Corporation

Carpenter Technology Corporation is engaged in the manufacturing, fabrication and distribution of specialty metals. The Company’s segments include Specialty Alloys Operations (SAO) and Performance Engineered Products (PEP). Its SAO segment consists of alloy and stainless steel manufacturing operations. Its PEP segment includes the Dynamet titanium business, the Carpenter Powder Products business, the Amega West business, the Specialty Steel Supply business and the Latrobe and Mexico distribution businesses. It develops, manufactures and distributes cast/wrought and powder metal stainless steels, and special alloys, including high temperature (iron-nickel-cobalt base), stainless, corrosion resistant, controlled expansion alloys, ultra-high strength and implantable alloys, tool and die steels and other specialty metals, as well as cast/wrought titanium alloys. The Company manufactures and rents down-hole drilling tools and components used in the oil and gas industry.

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