Analyzing Olympic Steel (ZEUS) and Carpenter Technology (CRS)

Olympic Steel (NASDAQ: ZEUS) and Carpenter Technology (NYSE:CRS) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Earnings & Valuation

This table compares Olympic Steel and Carpenter Technology’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Olympic Steel $1.06 billion 0.21 -$1.07 million $1.11 18.18
Carpenter Technology $1.80 billion 1.31 $47.00 million $1.62 30.99

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Olympic Steel and Carpenter Technology, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Olympic Steel 0 2 1 0 2.33
Carpenter Technology 0 3 3 0 2.50

Olympic Steel currently has a consensus price target of $23.50, suggesting a potential upside of 16.45%. Carpenter Technology has a consensus price target of $46.60, suggesting a potential downside of 7.19%. Given Olympic Steel’s higher possible upside, analysts plainly believe Olympic Steel is more favorable than Carpenter Technology.

Risk & Volatility

Olympic Steel has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500. Comparatively, Carpenter Technology has a beta of 2.07, indicating that its share price is 107% more volatile than the S&P 500.

Profitability

This table compares Olympic Steel and Carpenter Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Olympic Steel 0.99% 4.32% 1.89%
Carpenter Technology 4.06% 6.67% 2.77%

Insider & Institutional Ownership

68.0% of Olympic Steel shares are owned by institutional investors. Comparatively, 96.0% of Carpenter Technology shares are owned by institutional investors. 18.3% of Olympic Steel shares are owned by insiders. Comparatively, 4.5% of Carpenter Technology shares are owned by 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.

Dividends

Olympic Steel pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Carpenter Technology pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Olympic Steel pays out 7.2% of its earnings in the form of a dividend. Carpenter Technology pays out 44.4% 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.

Summary

Carpenter Technology beats Olympic Steel on 13 of the 16 factors compared between the two stocks.

About Olympic Steel

Olympic Steel, Inc. is a metals service center. The Company provides metals processing and distribution services for a range of customers. The Company operates through three segments: carbon flat products, specialty metals flat products, and tubular and pipe products. The Company’s carbon flat products segment’s focus is on the direct sale and distribution of large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. The Company’s specialty metals flat products segment’s focus is on the direct sale and distribution of processed aluminum and stainless flat-rolled sheet and coil products, flat bar products and fabricated parts. The Company’s tubular and pipe products segment consists of the Chicago Tube and Iron Company (CTI) business. Through its tubular and pipe products segment, it distributes metals tubing, pipe, bar, valve and fittings, and fabricate pressure parts supplied to various industrial markets.

About Carpenter Technology

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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