United States Steel Corporation (NYSE: X) and POSCO (NYSE:PKX) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitabiliy, valuation, institutional ownership and analyst recommendations.
This table compares United States Steel Corporation and POSCO’s net margins, return on equity and return on assets.
Institutional & Insider Ownership
67.6% of United States Steel Corporation shares are owned by institutional investors. Comparatively, 6.1% of POSCO shares are owned by institutional investors. 1.0% of United States Steel Corporation shares are owned by insiders. Comparatively, 0.0% of POSCO shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for United States Steel Corporation and POSCO, as provided by MarketBeat.com.
United States Steel Corporation currently has a consensus price target of $26.97, suggesting a potential upside of 18.24%. Given United States Steel Corporation’s higher possible upside, equities research analysts clearly believe United States Steel Corporation is more favorable than POSCO.
United States Steel Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. POSCO pays an annual dividend of $0.55 per share and has a dividend yield of 0.7%. United States Steel Corporation pays out 125.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. POSCO pays out 11.1% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares United States Steel Corporation and POSCO’s gross revenue, earnings per share and valuation.
POSCO has higher revenue and earnings than United States Steel Corporation. POSCO is trading at a lower price-to-earnings ratio than United States Steel Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
United States Steel Corporation has a beta of 2.88, meaning that its stock price is 188% more volatile than the S&P 500. Comparatively, POSCO has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.
About United States Steel Corporation
United States Steel Corporation is an integrated steel producer. The Company is engaged in producing flat-rolled and tubular products with production operations in North America and Europe. The Company operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE) and Tubular Products (Tubular). The Flat-Rolled segment includes the operating results of its integrated steel plants and equity investees in the United States involved in the production of slabs, rounds, strip mill plates, sheets and tin mill products, as well as all iron ore and coke production facilities in the United States. The USSE segment includes the operating results of U. S. Steel Kosice (USSK) and its integrated steel plant and coke production facilities in Slovakia. The Tubular segment includes the operating results of its tubular production facilities, primarily in the United States and equity investees in the United States and Brazil.
POSCO is a Korea-based company principally engaged in the manufacture and distribution of steel products. The Company operates in four segments: steel, trading, construction, and others. The steel segment includes production of steel products and sale of such products. The trading segment consists of global trading activities of POSCO Daewoo Corporation, exporting and importing a range of steel products that are both obtained from and supplied to it, as well as between other suppliers and purchasers in Korea and overseas. The construction segment includes planning, designing and construction of industrial plants, civil engineering projects, and commercial and residential buildings, both in Korea and overseas. The others segment includes power generation, liquefied natural gas (LNG) logistics, and network and system integration.