TimkenSteel (NYSE:TMST – Get Rating) and Nippon Steel (OTCMKTS:NISTF – Get Rating) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.
Analyst Ratings
This is a summary of recent ratings and price targets for TimkenSteel and Nippon Steel, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TimkenSteel | 0 | 0 | 1 | 0 | 3.00 |
| Nippon Steel | 0 | 0 | 0 | 0 | N/A |
TimkenSteel presently has a consensus price target of $24.00, indicating a potential upside of 23.33%. Given TimkenSteel’s higher probable upside, equities analysts clearly believe TimkenSteel is more favorable than Nippon Steel.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TimkenSteel | $1.30 billion | 0.66 | $65.10 million | $0.68 | 28.62 |
| Nippon Steel | N/A | N/A | N/A | $26.24 | 0.79 |
TimkenSteel has higher revenue and earnings than Nippon Steel. Nippon Steel is trading at a lower price-to-earnings ratio than TimkenSteel, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares TimkenSteel and Nippon Steel’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TimkenSteel | 3.26% | 11.03% | 6.98% |
| Nippon Steel | N/A | N/A | N/A |
Institutional & Insider Ownership
79.1% of TimkenSteel shares are owned by institutional investors. Comparatively, 11.4% of Nippon Steel shares are owned by institutional investors. 1.6% of TimkenSteel shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
TimkenSteel beats Nippon Steel on 9 of the 10 factors compared between the two stocks.
About TimkenSteel
TimkenSteel Corporation engages in manufacture and sale of alloy steel, and carbon and micro-alloy steel products in the United States and internationally. It offers carbon, micro-alloy, and alloy steel ingots, bars, tubes, and billets. Its products are used in gears; hubs; axles; crankshafts and connecting rods; oil country drill pipes; bits and collars; bearing races and rolling elements; bushings; fuel injectors; wind energy shafts; anti-friction bearings; and other applications. The company also provides custom-make precision steel components. It offers its products and services to the automotive; oil and gas; industrial equipment; mining; construction; rail; defense; heavy truck; agriculture; and power generation sectors. The company was founded in 1899 and is headquartered in Canton, Ohio.
About Nippon Steel
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. Nippon Steel Corporation was incorporated in 1950 and is headquartered in Tokyo, Japan.
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