Critical Review: U.S. Steel (X) & Usiminas (OTCMKTS:USNZY)

U.S. Steel (NYSE: X) and Usiminas (OTCMKTS:USNZY) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Risk and Volatility

U.S. Steel has a beta of 3.01, indicating that its stock price is 201% more volatile than the S&P 500. Comparatively, Usiminas has a beta of 3.39, indicating that its stock price is 239% more volatile than the S&P 500.

Profitability

This table compares U.S. Steel and Usiminas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
U.S. Steel 4.62% 17.92% 5.52%
Usiminas 2.17% 1.54% 0.91%

Dividends

U.S. Steel pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Usiminas pays an annual dividend of $0.01 per share and has a dividend yield of 0.4%. U.S. Steel pays out 10.3% of its earnings in the form of a dividend.

Insider & Institutional Ownership

66.7% of U.S. Steel shares are owned by institutional investors. 1.0% of U.S. Steel shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares U.S. Steel and Usiminas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
U.S. Steel $12.25 billion 0.53 $387.00 million $1.94 18.79
Usiminas $3.36 billion 0.43 $72.98 million N/A N/A

U.S. Steel has higher revenue and earnings than Usiminas.

Analyst Ratings

This is a summary of recent recommendations for U.S. Steel and Usiminas, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
U.S. Steel 3 6 10 0 2.37
Usiminas 0 0 0 0 N/A

U.S. Steel presently has a consensus price target of $40.31, suggesting a potential upside of 10.55%. Given U.S. Steel’s higher probable upside, equities analysts plainly believe U.S. Steel is more favorable than Usiminas.

Summary

U.S. Steel beats Usiminas on 11 of the 13 factors compared between the two stocks.

About U.S. Steel

United States Steel Corporation produces and sells flat-rolled and tubular steel products primarily in North America and Europe. It operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-Rolled segment offers slabs, rounds, strip mill plates, sheets, and tin mill products. This segment serves customers in the service center, conversion, automotive, construction, container, and appliance and electrical markets. The USSE segment provides slabs, sheets, strip mill plates, tin mill products, and spiral welded pipes, as well as heating radiators and refractory ceramic materials. This segment serves customers in the construction, service center, conversion, container, transportation, appliance and electrical, oil, gas, and petrochemical markets. The Tubular segment offers seamless and electric resistance welded steel casing and tubing products; and standard and line pipe and mechanical tubing products primarily to customers in the oil, gas, and petrochemical markets. The company also provides railroad services; and owns, develops, and manages various real estate assets. United States Steel Corporation was founded in 1901 and is headquartered in Pittsburgh, Pennsylvania.

About Usiminas

Usinas Siderúrgicas de Minas Gerais S.A. manufactures and markets flat steel products in Brazil and internationally. The company's products include heavy plates, sincron, hot and cold rolled products, laser welded assemblies, slits/rolls, blanks, and hot-dip galvanized and electrogalvanized coils and sheets. It also provides pipes in various sizes, shapes, and thicknesses. The company serves appliance, agricultural and highway machinery, construction and infrastructure, energy, shipbuilding, automotive, and distribution markets. Usinas Siderúrgicas de Minas Gerais S.A. was founded in 1950 and is based in Belo Horizonte, Brazil.

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