Olympic Steel (NASDAQ:ZEUS – Get Free Report) and Worthington Steel (NYSE:WS – Get Free Report) are both small-cap materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.
Volatility and Risk
Olympic Steel has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500. Comparatively, Worthington Steel has a beta of 2.12, meaning that its stock price is 112% more volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Olympic Steel and Worthington Steel, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Olympic Steel | 0 | 1 | 0 | 0 | 2.00 |
| Worthington Steel | 1 | 1 | 1 | 0 | 2.00 |
Worthington Steel has a consensus target price of $46.00, suggesting a potential upside of 19.81%. Given Worthington Steel’s higher probable upside, analysts plainly believe Worthington Steel is more favorable than Olympic Steel.
Profitability
This table compares Olympic Steel and Worthington Steel’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Olympic Steel | 0.73% | 2.11% | 1.14% |
| Worthington Steel | -0.56% | 7.49% | 3.14% |
Earnings and Valuation
This table compares Olympic Steel and Worthington Steel”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Olympic Steel | $1.90 billion | 0.28 | $22.98 million | $1.17 | 40.91 |
| Worthington Steel | $3.44 billion | 0.57 | $8.50 million | ($0.61) | -62.94 |
Olympic Steel has higher earnings, but lower revenue than Worthington Steel. Worthington Steel is trading at a lower price-to-earnings ratio than Olympic Steel, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
87.1% of Olympic Steel shares are owned by institutional investors. Comparatively, 45.4% of Worthington Steel shares are owned by institutional investors. 13.8% of Olympic Steel shares are owned by insiders. Comparatively, 2.7% of Worthington Steel shares are owned by 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
Olympic Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. Worthington Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.7%. Olympic Steel pays out 54.7% of its earnings in the form of a dividend. Worthington Steel pays out -104.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Olympic Steel has raised its dividend for 4 consecutive years. Worthington Steel is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Worthington Steel beats Olympic Steel on 9 of the 16 factors compared between the two stocks.
About Olympic Steel
Olympic Steel, Inc. is a U.S. metals service center that processes and distributes metals for manufacturers and other industrial customers. Founded in 1954 and headquartered in Cleveland, Ohio, the company serves customers through a network of facilities across North America. Its products include carbon and coated steel, stainless steel, aluminum, and tubular and pipe products. Olympic Steel also provides processing services such as cutting, slitting, and plate processing, helping customers prepare materials for use in their own manufacturing operations.
About Worthington Steel
Worthington Steel, Inc. is a steel processor that buys flat-rolled steel and prepares it to meet customers’ specifications. Its services include slitting, cutting to length, blanking and other processing, as well as the production of tailor-welded blanks and electrical steel laminations. The company serves customers in industries including automotive, construction, agriculture, energy and electrical manufacturing. Its operations and customer base span North America and Europe. Worthington Steel became an independent, publicly traded company in December 2023 through the separation of Worthington Industries’ steel processing business.
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