Nucor Corporation (NUE) vs. L.B. Foster (FSTR) Critical Analysis

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

Profitability

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

Net Margins Return on Equity Return on Assets
Nucor Corporation 6.08% 13.39% 7.20%
L.B. Foster -9.83% -27.82% -10.07%

Dividends

Nucor Corporation pays an annual dividend of $1.51 per share and has a dividend yield of 2.8%. L.B. Foster does not pay a dividend. Nucor Corporation pays out 43.8% of its earnings in the form of a dividend. Nucor Corporation has increased its dividend for 43 consecutive years.

Analyst Ratings

This is a summary of recent ratings and target prices for Nucor Corporation and L.B. Foster, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nucor Corporation 0 5 10 0 2.67
L.B. Foster 0 0 0 0 N/A

Nucor Corporation presently has a consensus price target of $68.77, indicating a potential upside of 28.58%. Given Nucor Corporation’s higher probable upside, analysts clearly believe Nucor Corporation is more favorable than L.B. Foster.

Earnings & Valuation

This table compares Nucor Corporation and L.B. Foster’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nucor Corporation $18.24 billion 0.94 $2.67 billion $3.45 15.50
L.B. Foster $484.77 million 0.42 $23.17 million ($4.49) -4.35

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

Institutional & Insider Ownership

75.0% of Nucor Corporation shares are held by institutional investors. Comparatively, 71.1% of L.B. Foster shares are held by institutional investors. 0.7% of Nucor Corporation shares are held by company insiders. Comparatively, 15.2% of L.B. Foster shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Nucor Corporation has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, L.B. Foster has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500.

Summary

Nucor Corporation beats L.B. Foster on 12 of the 15 factors compared between the two stocks.

About Nucor Corporation

Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

About L.B. Foster

L.B. Foster Company is a manufacturer, fabricator and distributor of products and services for the rail, construction, energy and utility markets. The Company’s segments include Rail Products and Services, Construction Products, and Tubular and Energy Services. Its Rail Products segment provides a range of new and used rail, trackwork and accessories to railroads, mines and industry. The Rail segment designs and produces concrete railroad ties, insulated rail joints, power rail, track fasteners, coverboards and special accessories for mass transit and other rail systems. The Construction Products segment sells and rents steel sheet piling, H-bearing pile and other piling products for foundation and earth retention requirements. The Tubular and Energy Services segment supplies pipe coatings for natural gas pipelines and utilities, blending, injection and metering equipment for the oil and gas market, and produces threaded pipe products for industrial water well and irrigation markets.

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