Financial Review: China Gerui Adv Mtals Grp (CHOP) vs. Steel Dynamics (STLD)

China Gerui Adv Mtals Grp (NASDAQ: CHOP) and Steel Dynamics (NASDAQ:STLD) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitabiliy.

Insider and Institutional Ownership

83.6% of Steel Dynamics shares are owned by institutional investors. 4.2% of Steel Dynamics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Steel Dynamics pays an annual dividend of $0.62 per share and has a dividend yield of 1.9%. China Gerui Adv Mtals Grp does not pay a dividend. Steel Dynamics pays out 29.2% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and recommmendations for China Gerui Adv Mtals Grp and Steel Dynamics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Gerui Adv Mtals Grp 0 0 0 0 N/A
Steel Dynamics 0 2 13 0 2.87

Steel Dynamics has a consensus price target of $39.07, suggesting a potential upside of 16.67%. Given Steel Dynamics’ higher possible upside, analysts plainly believe Steel Dynamics is more favorable than China Gerui Adv Mtals Grp.

Profitability

This table compares China Gerui Adv Mtals Grp and Steel Dynamics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Gerui Adv Mtals Grp -1,066.72% -48.92% -25.05%
Steel Dynamics 6.19% 21.77% 9.17%

Earnings & Valuation

This table compares China Gerui Adv Mtals Grp and Steel Dynamics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
China Gerui Adv Mtals Grp N/A N/A N/A N/A N/A
Steel Dynamics $8.40 billion 0.96 $1.36 billion $2.12 15.80

Steel Dynamics has higher revenue and earnings than China Gerui Adv Mtals Grp.

Summary

Steel Dynamics beats China Gerui Adv Mtals Grp on 9 of the 10 factors compared between the two stocks.

About China Gerui Adv Mtals Grp

China Gerui Advanced Materials Group Ltd is a contract manufacturer of high precision cold-rolled narrow strip steel products. The Company converts steel manufactured by third parties into thin steel sheets and strips according to its customers’ specifications. It produces ultra-thin, high-strength cold-rolled steel products, with thicknesses starting from 0.05 mm width up to 600 mm and tolerance +/- 0.003mm. The Company sells its products to domestic Chinese customers who primarily operate in the food and industrial packaging, construction and household decorations materials, electrical appliances, and telecommunications wires and cables industries. The Company operates 11 sets of cold-rolled steel production lines with a current annual steel processing capacity of approximately 500,000 metric tons and two chromium-plating production lines with total annual processing capacity of approximately 250,000 metric tons. It has five series and over 20 types of strip steel products.

About Steel Dynamics

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.

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