Head to Head Comparison: Commercial Metals (CMC) & Titan International (TWI)

Commercial Metals (NYSE: CMC) and Titan International (NYSE:TWI) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Earnings and Valuation

This table compares Commercial Metals and Titan International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Commercial Metals $4.57 billion 0.55 $46.33 million $0.62 34.81
Titan International $1.47 billion 0.47 -$60.04 million ($0.49) -23.37

Commercial Metals has higher revenue and earnings than Titan International. Titan International is trading at a lower price-to-earnings ratio than Commercial Metals, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Commercial Metals has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500. Comparatively, Titan International has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500.

Profitability

This table compares Commercial Metals and Titan International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Commercial Metals 1.15% 8.05% 3.81%
Titan International -4.31% -6.94% -1.80%

Dividends

Commercial Metals pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. Titan International pays an annual dividend of $0.02 per share and has a dividend yield of 0.2%. Commercial Metals pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Titan International pays out -4.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Commercial Metals and Titan International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Commercial Metals 3 2 4 0 2.11
Titan International 0 1 1 0 2.50

Commercial Metals currently has a consensus target price of $23.00, indicating a potential upside of 6.58%. Titan International has a consensus target price of $12.00, indicating a potential upside of 4.80%. Given Commercial Metals’ higher possible upside, research analysts plainly believe Commercial Metals is more favorable than Titan International.

Insider & Institutional Ownership

88.3% of Commercial Metals shares are owned by institutional investors. Comparatively, 86.8% of Titan International shares are owned by institutional investors. 1.5% of Commercial Metals shares are owned by company insiders. Comparatively, 17.8% of Titan International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Commercial Metals beats Titan International on 11 of the 15 factors compared between the two stocks.

About Commercial Metals

Commercial Metals Company manufactures, recycles, and markets steel and metal products, and related materials and services in the United States and internationally. It operates through five segments: Americas Recycling, Americas Mills, Americas Fabrication, International Mill, and International Marketing and Distribution. The Americas Recycling segment processes and sells scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. The Americas Mills segment manufactures finished long steel products, including reinforcing bars, merchant bars, light structural products, and other special sections, as well as semi-finished billets for re-rolling and forging applications. This segment sells its products to construction, service center, transportation, steel warehousing, fabrication, energy, petrochemical, and original equipment manufacturing industries. The Americas Fabrication segment offers fabricated steel products for use in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams. The International Mill segment manufactures rebars, merchant bars, and wire rods, as well as semi-finished billets; and sells fabricated rebars, fabricated meshes, assembled rebar cages, and other rebar by-products. This segment sells its products to fabricators, manufacturers, distributors, and construction companies. The International Marketing and Distribution segment processes, sells, and distributes steel products, ferrous and nonferrous metals, and other industrial products to manufacturers in the steel, nonferrous metals, metal fabrication, chemical, refractory, construction, and transportation industries. The company was founded in 1915 and is headquartered in Irving, Texas.

About Titan International

Titan International, Inc. is a wheel, tire, and undercarriage industrial manufacturer and supplier. The Company’s segments are agricultural, earthmoving/construction, and consumer. The Company produces a range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. Its agricultural products include rims, wheels, tires, and undercarriage systems and components manufactured for use on various agricultural equipment. Its earthmoving/construction products include rims, wheels, tires, and undercarriage systems and components for various types of off-the-road (OTR) earthmoving, mining, military, construction, and forestry equipment. The Company’s consumer products include, but are not limited to, bias truck tires in Latin America and light truck tires in Russia, as well as products for all-terrain vehicles (ATVs), turf, and golf cart applications.

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