Steel Dynamics (NASDAQ: STLD) and Gibraltar Industries (NASDAQ:ROCK) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Valuation & Earnings

This table compares Steel Dynamics and Gibraltar Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Steel Dynamics $8.77 billion 0.95 $1.37 billion $2.17 15.97
Gibraltar Industries $958.80 million 0.93 $109.22 million $0.71 39.65

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

Risk and Volatility

Steel Dynamics has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Gibraltar Industries has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Steel Dynamics and Gibraltar Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Steel Dynamics 0 2 13 0 2.87
Gibraltar Industries 0 0 2 0 3.00

Steel Dynamics presently has a consensus target price of $42.31, indicating a potential upside of 22.10%. Gibraltar Industries has a consensus target price of $34.50, indicating a potential upside of 22.56%. Given Gibraltar Industries’ stronger consensus rating and higher probable upside, analysts clearly believe Gibraltar Industries is more favorable than Steel Dynamics.

Insider & Institutional Ownership

85.6% of Steel Dynamics shares are owned by institutional investors. 4.2% of Steel Dynamics shares are owned by company insiders. Comparatively, 0.5% of Gibraltar Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Steel Dynamics pays an annual dividend of $0.62 per share and has a dividend yield of 1.8%. Gibraltar Industries does not pay a dividend. Steel Dynamics pays out 28.6% of its earnings in the form of a dividend.

Profitability

This table compares Steel Dynamics and Gibraltar Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Steel Dynamics 6.07% 21.75% 9.34%
Gibraltar Industries 2.38% 10.14% 5.09%

Summary

Steel Dynamics beats Gibraltar Industries on 11 of the 16 factors compared between the two stocks.

Steel Dynamics Company Profile

Steel Dynamics, Inc. is a steel producing and a metal recycling company. The Company is engaged in the manufacture and sale of steel products, processing and sale of recycled ferrous and nonferrous metals, and fabrication and sale of steel joists and deck products. Its segments include steel operations, metals recycling operations, steel fabrication operations and Other Operations. It offers a range of steel products, such as sheet products, long products and steel finishing. The steel operations segment includes Butler Flat Roll Division, Columbus Flat Roll Division, The Techs galvanizing lines, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, Steel of West Virginia and Iron Dynamics. The metals recycling operations segment consists of OmniSource Corporation. The fabrication operations produce steel building components. The Other Operations segment consists of subsidiary operations and smaller joint ventures.

Gibraltar Industries Company Profile

Gibraltar Industries, Inc. is a manufacturer and distributor of building products for industrial, transportation infrastructure, residential housing, renewable energy and resource conservation markets. The Company’s segments include Residential Products; Industrial and Infrastructure Products, and Renewable Energy and Conservation. The Residential Products segment services residential housing construction and residential repair and remodeling activity with products including roof and foundation ventilation products, rain dispersion products and roof ventilation accessories. The Industrial and Infrastructure Products segment focuses on a range of markets, including industrial and commercial construction, automotive, airports and energy and power generation markets with products. The Renewable Energy and Conservation segment focuses on the design, engineering, manufacturing and installation of solar racking systems and commercial, institutional and retail greenhouse structures.

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