Olympic Steel (NASDAQ:ZEUS – Get Free Report) and Worthington Steel (NYSE:WS – Get Free Report) are both small-cap materials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.
Profitability
This table compares Olympic Steel and Worthington Steel’s 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% |
| Worthington Steel | -0.56% | 7.49% | 3.14% |
Dividends
Olympic Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. Worthington Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.6%. Olympic Steel pays out 54.7% of its earnings in the form of a dividend. Worthington Steel pays out -104.9% 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. Olympic Steel has increased its dividend for 4 consecutive years. Worthington Steel is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Olympic Steel and Worthington Steel, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Olympic Steel | 0 | 1 | 0 | 0 | 2.00 |
| Worthington Steel | 1 | 1 | 1 | 0 | 2.00 |
Worthington Steel has a consensus price target of $46.00, indicating a potential upside of 16.56%. Given Worthington Steel’s higher possible upside, analysts clearly believe Worthington Steel is more favorable than Olympic Steel.
Earnings & Valuation
This table compares Olympic Steel and Worthington Steel”s top-line 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 |
| Worthington Steel | $3.44 billion | 0.59 | $8.50 million | ($0.61) | -64.69 |
Olympic Steel has higher earnings, but lower revenue than Worthington Steel. Worthington Steel 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 and Risk
Olympic Steel has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, Worthington Steel has a beta of 2.12, suggesting that its share price is 112% more volatile than the S&P 500.
Institutional & Insider Ownership
87.1% of Olympic Steel shares are held by institutional investors. Comparatively, 45.4% of Worthington Steel shares are held by institutional investors. 13.8% of Olympic Steel shares are held by company insiders. Comparatively, 2.7% of Worthington Steel shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Summary
Worthington Steel beats Olympic Steel on 9 of the 16 factors compared between the two stocks.
About Olympic Steel
Olympic Steel, Inc. is a metals service center headquartered in Highland Hills, Ohio. Founded in 1954, the company distributes and processes a broad range of steel and other metal products for customers in manufacturing, construction, transportation, machinery, energy and related industries. The company’s product offerings include carbon and coated flat-rolled steel, steel plate, stainless steel, aluminum, tubular and pipe products, and other specialty metals. Olympic Steel also provides value-added processing services, such as cutting, slitting, leveling, laser processing, machining, forming, welding and custom fabrication, helping customers receive materials in specifications suited to their production requirements.
About Worthington Steel
Worthington Steel, Inc. is a steel processor that buys flat-rolled steel and prepares it to meet customers’ specifications. Its services include slitting, cutting to length, blanking and other processing, as well as the production of tailor-welded blanks and electrical steel laminations. The company serves customers in industries including automotive, construction, agriculture, energy and electrical manufacturing. Its operations and customer base span North America and Europe. Worthington Steel became an independent, publicly traded company in December 2023 through the separation of Worthington Industries’ steel processing business.
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