Head to Head Comparison: AK Steel Holding Corporation (AKS) & Timken Steel Corporation (TMST)
AK Steel Holding Corporation (NYSE: AKS) and Timken Steel Corporation (NYSE:TMST) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitabiliy and dividends.
Volatility & Risk
AK Steel Holding Corporation has a beta of 2.81, meaning that its stock price is 181% more volatile than the S&P 500. Comparatively, Timken Steel Corporation has a beta of 2.27, meaning that its stock price is 127% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for AK Steel Holding Corporation and Timken Steel Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|AK Steel Holding Corporation||1||8||5||0||2.29|
|Timken Steel Corporation||0||2||1||0||2.33|
AK Steel Holding Corporation currently has a consensus target price of $7.74, suggesting a potential upside of 29.19%. Timken Steel Corporation has a consensus target price of $19.75, suggesting a potential upside of 52.27%. Given Timken Steel Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Timken Steel Corporation is more favorable than AK Steel Holding Corporation.
Insider and Institutional Ownership
76.7% of AK Steel Holding Corporation shares are held by institutional investors. Comparatively, 75.2% of Timken Steel Corporation shares are held by institutional investors. 1.8% of AK Steel Holding Corporation shares are held by company insiders. Comparatively, 8.1% of Timken Steel Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This table compares AK Steel Holding Corporation and Timken Steel Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|AK Steel Holding Corporation||1.16%||-235.11%||5.15%|
|Timken Steel Corporation||-10.34%||-15.69%||-9.06%|
Valuation and Earnings
This table compares AK Steel Holding Corporation and Timken Steel Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|AK Steel Holding Corporation||$5.90 billion||0.32||$670.60 million||$0.26||23.04|
|Timken Steel Corporation||$961.00 million||0.60||-$42.70 million||($2.26)||-5.74|
AK Steel Holding Corporation has higher revenue and earnings than Timken Steel Corporation. Timken Steel Corporation is trading at a lower price-to-earnings ratio than AK Steel Holding Corporation, indicating that it is currently the more affordable of the two stocks.
AK Steel Holding Corporation beats Timken Steel Corporation on 8 of the 13 factors compared between the two stocks.
AK Steel Holding Corporation Company Profile
AK Steel Holding Corporation is a producer of flat-rolled carbon, stainless and electrical steels, and tubular products through its subsidiary, AK Steel Corporation (AK Steel). The Company also operates blast furnaces and electric arc furnaces. As of December 31, 2016, its operations included eight steelmaking and finishing plants, two coke plants and two tube manufacturing plants across states, including Indiana, Kentucky, Michigan, Ohio, Pennsylvania and West Virginia, and a tube manufacturing plant in Mexico. These operations produce flat-rolled carbon, specialty stainless and electrical steels that it sells in sheet and strip form, and carbon and stainless steel that it finishes into welded steel tubing. It also produces metallurgical coal through its subsidiary, AK Coal Resources, Inc. In addition, the Company operates trading companies in Mexico and Europe that buy and sell steel and steel products and other materials.
Timken Steel Corporation Company Profile
TimkenSteel Corporation manufactures alloy steel, as well as carbon and micro-alloy steel. The Company’s portfolio includes special bar quality (SBQ) bars, seamless mechanical tubing and precision steel components. In addition, the Company supplies machining and thermal treatment services, as well as manage raw material recycling programs, which are used as a feeder system for its melt operations. The Company’s products include SBQ Steel and Seamless Mechanical Steel Tubing, and Value-added Precision Products and Services. Its focus is on alloy steel. The Company manufactures carbon, micro-alloy and alloy steel, sold as ingots, bars and tubes. In addition to its customized steels, the Company also manufactures custom-make precision components. Its products and services are used in a range of demanding applications in the market sectors, such as oil and gas, industrial equipment, mining and power generation.
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