Critical Contrast: Ternium (NYSE:TX) and L.B. Foster (NASDAQ:FSTR)

Ternium (NYSE:TX) and L.B. Foster (NASDAQ:FSTR) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Earnings & Valuation

This table compares Ternium and L.B. Foster”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ternium	$15.61 billion	0.59	$425.23 million	$2.91	15.66
L.B. Foster	$540.01 million	0.79	$7.55 million	$1.03	39.73

Ternium has higher revenue and earnings than L.B. Foster. Ternium is trading at a lower price-to-earnings ratio than L.B. Foster, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

12.0% of Ternium shares are owned by institutional investors. Comparatively, 80.6% of L.B. Foster shares are owned by institutional investors. 0.0% of Ternium shares are owned by insiders. Comparatively, 7.6% of L.B. Foster shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Ternium and L.B. Foster, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ternium	1	4	4	1	2.50
L.B. Foster	0	3	1	0	2.25

Ternium presently has a consensus price target of $41.81, suggesting a potential downside of 8.23%. L.B. Foster has a consensus price target of $32.00, suggesting a potential downside of 21.80%. Given Ternium’s stronger consensus rating and higher possible upside, equities analysts plainly believe Ternium is more favorable than L.B. Foster.

Risk & Volatility

Ternium has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, L.B. Foster has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Profitability

This table compares Ternium and L.B. Foster’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ternium	3.66%	3.70%	2.55%
L.B. Foster	1.98%	6.36%	3.31%

Summary

Ternium beats L.B. Foster on 9 of the 15 factors compared between the two stocks.

About Ternium

Ternium S.A., together with its subsidiaries, manufactures and distributes steel products in Mexico, Southern Region, Brazil, and internationally. It operates through three segments: Steel, Mining, and Usiminas. The Steel segment offers slabs, hot and cold rolled products, coated products, roll formed and tubular products, bars, billets, and other products. Its Mining segment sells iron ore and pellets. The Usiminas segment offers iron ore extraction, steel transformation, and production of capital goods and logistics; and manufactures and sells various products and raw materials, such as flat steel, iron ore, and stamped steel parts for the automotive industry and products for the civil construction and capital goods industry. It also provides medical and social; scrap; renewable energy; and engineering and other services, as well as operates as a distribution company. In addition, the company engages in the exploration, exploitation, and pelletizing of iron ore. Ternium S.A. was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.

About L.B. Foster

L.B. Foster Company provides engineered and manufactured products and services for the building and infrastructure projects in the United States, Canada, the United Kingdom, and internationally. It operates through two segments: Rail, Technologies, and Services; and Infrastructure Solutions. The Rail, Technologies, and Services segment offers new rail to passenger and short line freight railroads, industrial companies, and rail contractors, as well as used rails; rail accessories, such as rack spikes, bolts, angle bars, tie plates, and other products; insulated rail joints and related accessories; fixation fasteners, coverboards, and special accessories; and trackwork products. This segment also provides engineered concrete railroad ties, friction management products and application systems, railroad condition monitoring systems and equipment including wheel impact load detection systems, wayside data collection and management systems, and rockfall, flood, earthworks, and bridge strike monitoring; and aftermarket services. The Infrastructure Solutions segment manufactures precast concrete products for use as restrooms, concession stands, and protective storage buildings under the CXT brand for national, state, and municipal parks; and manufactures sounds walls, bridge beams, box culverts, septic tanks, and other custom pre-stressed and precast concrete products. This segment also provides steel bridge products; corrosion protection solutions; concrete-reinforced steel grid decking, open steel grid deck, aluminum bridge railing, and stay-in-place steel bridge forms; cuts, threads, and paints pipe; threading services for water well applications; protective pipeline coating services; and turnkey solutions for metering and injection systems for oil and gas markets. L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.