Nippon Steel & Sumitomo Metal (OTCMKTS:NPSCY – Get Free Report) and POSCO (NYSE:PKX – Get Free Report) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.
Earnings and Valuation
This table compares Nippon Steel & Sumitomo Metal and POSCO”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nippon Steel & Sumitomo Metal | $57.10 billion | 0.41 | $2.31 billion | ($0.05) | -87.20 |
| POSCO | $48.64 billion | N/A | $463.23 million | $1.32 | 49.64 |
Analyst Recommendations
This is a summary of recent ratings for Nippon Steel & Sumitomo Metal and POSCO, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nippon Steel & Sumitomo Metal | 0 | 0 | 0 | 0 | 0.00 |
| POSCO | 1 | 1 | 1 | 0 | 2.00 |
Risk & Volatility
Nippon Steel & Sumitomo Metal has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, POSCO has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.
Profitability
This table compares Nippon Steel & Sumitomo Metal and POSCO’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nippon Steel & Sumitomo Metal | -0.42% | -0.61% | -0.30% |
| POSCO | 0.97% | 1.09% | 0.66% |
Dividends
Nippon Steel & Sumitomo Metal pays an annual dividend of $0.09 per share and has a dividend yield of 2.1%. POSCO pays an annual dividend of $1.33 per share and has a dividend yield of 2.0%. Nippon Steel & Sumitomo Metal pays out -180.0% of its earnings in the form of a dividend. POSCO pays out 100.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nippon Steel & Sumitomo Metal is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
POSCO beats Nippon Steel & Sumitomo Metal on 8 of the 12 factors compared between the two stocks.
About Nippon Steel & Sumitomo Metal
Nippon Steel Corporation engages in steelmaking and steel fabrication, engineering and construction, chemicals and materials, and system solutions businesses in Japan and internationally. The company offers steel plates, sheets, and slags; bar and rod materials; structural steel; pipes and tubes; titanium and stainless products; and railway, automotive, and machinery parts for applications in automotive, energy, infrastructure, and consumer electronics markets. It is also involved in construction; waste processing and recycling; supplying electricity, gas, and heat; and the provision of coal-based chemical products, petrochemicals, electronic materials, materials and components for semiconductors and electronic parts, carbon fiber, and composite products. In addition, the company offers computer systems engineering and consulting, IT-enabled outsourcing, and other services. The company was formerly known as Nippon Steel & Sumitomo Metal Corporation and changed its name to Nippon Steel Corporation in April 2019. The company was incorporated in 1950 and is headquartered in Tokyo, Japan.
About POSCO
POSCO Holdings Inc., together with its subsidiaries, operates as an integrated steel producer in Korea and internationally. It operates through six segments: Steel, Trading, Construction, Logistics and Others, Green Materials and Energy, and Others. The company engages in the production, import, sale, and export of steel products, such as hot and cold rolled steel, stainless steel, plates, wire rods, and silicon steel sheets, as well as pig iron, billets, blooms, and slabs; trading of steel and raw materials, textiles, agricultural commodities, and other goods; natural resources development and power generation activities; and planning, designing, and construction of industrial plants, civil engineering projects, and commercial and residential buildings. It is also involved in the manufacture and sale of various energy-related and other industrial materials, including anode and cathode materials for rechargeable batteries; investment business; and provision of alternative environmentally-friendly energy solutions, as well as information technology and operational technology, and integrated logistics services. POSCO Holdings Inc. was incorporated in 1968 and is based in Seoul, South Korea.
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