Pool (POOL) & Schnitzer Steel Industries (SCHN) Head to Head Analysis

Pool (NASDAQ: POOL) and Schnitzer Steel Industries (NASDAQ:SCHN) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Dividends

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Pool pays an annual dividend of $1.48 per share and has a dividend yield of 1.0%. Schnitzer Steel Industries pays an annual dividend of $0.75 per share and has a dividend yield of 2.4%. Pool pays out 37.1% of its earnings in the form of a dividend. Schnitzer Steel Industries pays out 49.0% 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.

Earnings and Valuation

This table compares Pool and Schnitzer Steel Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pool $2.79 billion 2.12 $191.63 million $3.99 36.46
Schnitzer Steel Industries $1.69 billion 0.50 $44.51 million $1.53 20.39

Pool has higher revenue and earnings than Schnitzer Steel Industries. Schnitzer Steel Industries is trading at a lower price-to-earnings ratio than Pool, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Pool and Schnitzer Steel Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pool 6.87% 70.46% 14.14%
Schnitzer Steel Industries 4.68% 14.28% 8.05%

Volatility & Risk

Pool has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500. Comparatively, Schnitzer Steel Industries has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500.

Institutional and Insider Ownership

95.3% of Pool shares are owned by institutional investors. Comparatively, 91.0% of Schnitzer Steel Industries shares are owned by institutional investors. 6.0% of Pool shares are owned by insiders. Comparatively, 3.5% of Schnitzer Steel Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Pool and Schnitzer Steel Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pool 0 1 3 0 2.75
Schnitzer Steel Industries 0 3 1 0 2.25

Pool presently has a consensus target price of $149.67, indicating a potential upside of 2.88%. Schnitzer Steel Industries has a consensus target price of $32.33, indicating a potential upside of 3.63%. Given Schnitzer Steel Industries’ higher possible upside, analysts clearly believe Schnitzer Steel Industries is more favorable than Pool.

Summary

Pool beats Schnitzer Steel Industries on 13 of the 16 factors compared between the two stocks.

About Pool

Pool Corporation distributes swimming pool supplies, equipment, and related leisure products in North America, Europe, South America, and Australia. The company offers maintenance products, including chemicals, supplies, and pool accessories; repair and replacement parts for pool equipment, such as cleaners, filters, heaters, pumps, and lights; packaged pool kits comprising walls, liners, braces, and coping for in-ground and above-ground pools; pool equipment and components for new pool construction and the remodeling of existing pools; and irrigation and landscape products consisting of irrigation system components, and professional lawn care equipment and supplies. It also provides building materials, such as concrete, plumbing and electrical components, functional and decorative pool surfaces, decking materials, tiles, hardscapes, and natural stones for use in pool installations and remodeling; and commercial products, such as ASME heaters, safety equipment, and commercial pumps and filters. In addition, the company offers discretionary recreational and related outdoor lifestyle products that enhance consumers' use and enjoyment of outdoor living spaces, such as spas, grills, and components for outdoor kitchens. It serves swimming pool remodelers and builders; specialty retailers that sell swimming pool supplies; swimming pool repair and service businesses; irrigation construction and landscape maintenance contractors; and golf course and other commercial customers. As of December 31, 2017, the company operated 351 sales centers. Pool Corporation was founded in 1993 and is headquartered in Covington, Louisiana.

About Schnitzer Steel Industries

Schnitzer Steel Industries, Inc. is a recycler of ferrous and nonferrous scrap metal, including end-of-life vehicles, and a manufacturer of finished steel products. The Company operates through two segments: the Auto and Metals Recycling (AMR) business and the Steel Manufacturing Business (SMB). The AMR segment collects and recycles auto bodies, rail cars, home appliances, industrial machinery, manufacturing scrap and construction and demolition scrap from bridges, buildings and other infrastructure. AMR’s primary products include recycled ferrous and nonferrous scrap metal. The SMB segment produces finished steel products such as rebar, wire rod, coiled rebar, merchant bar and other specialty products using 100% recycled metal sourced from AMR. SMB’s products are primarily used in nonresidential and infrastructure construction in North America. SMB operates a steel mini-mill in McMinnville, Oregon that produces finished steel products using recycled metal and other raw materials.

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