Critical Review: SSAB (SSAAY) and Its Peers

SSAB (OTCMKTS:SSAAY) is one of 27 public companies in the “STEEL – PRODUCERS” industry, but how does it contrast to its peers? We will compare SSAB to similar companies based on the strength of its analyst recommendations, institutional ownership, valuation, risk, dividends, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations for SSAB and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SSAB	0	2	0	0	2.00
SSAB Competitors	434	1542	1654	59	2.36

As a group, “STEEL – PRODUCERS” companies have a potential upside of 5.60%. Given SSAB’s peers stronger consensus rating and higher probable upside, analysts clearly believe SSAB has less favorable growth aspects than its peers.

Volatility & Risk

SSAB has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, SSAB’s peers have a beta of 1.26, suggesting that their average stock price is 26% more volatile than the S&P 500.

Dividends

SSAB pays an annual dividend of $0.09 per share and has a dividend yield of 2.9%. SSAB pays out 39.1% of its earnings in the form of a dividend. As a group, “STEEL – PRODUCERS” companies pay a dividend yield of 2.3% and pay out 82.9% of their earnings in the form of a dividend. SSAB is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

54.8% of shares of all “STEEL – PRODUCERS” companies are owned by institutional investors. 5.5% of shares of all “STEEL – PRODUCERS” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares SSAB and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
SSAB	$9.78 billion	$617.08 million	13.41
SSAB Competitors	$20.63 billion	$280.11 million	21.58

SSAB’s peers have higher revenue, but lower earnings than SSAB. SSAB is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares SSAB and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SSAB	4.99%	7.30%	4.68%
SSAB Competitors	2.01%	0.96%	1.37%

Summary

SSAB peers beat SSAB on 8 of the 15 factors compared.

About SSAB

SSAB AB (publ) produces and sells steel products in Sweden, Finland, Rest of Europe, the United States, and internationally. It operates through five segments: SSAB Special Steels, SSAB Europe, SSAB Americas, Tibnor, and Ruukki Construction. The SSAB Special Steels segment offers quenched and tempered steels, and advanced high-strength steel products for steel and plate production. The SSAB Europe segment provides strip, heavy plate, and tubular products. The SSAB Americas segment sells heavy plates for steel and plate production. The Tibnor segment distributes a range of steel and non-ferrous metals in the Nordics and Baltics. The Ruukki Construction segment produces and sells energy-efficient building and construction solutions. It markets its steel products under the Strenx, Hardox, Docol, GreenCoat, Toolox, Armox, Duroxite, SSAB AM, SSAB Boron, SSAB Domex, SSAB Form, SSAB Laser, SSAB Weathering, Cor-Ten, and SSAB Multisteel brands. The company's products are used by customers in the heavy transport, construction and infrastructure, industrial applications, construction machinery, energy, and material handling markets. SSAB AB (publ) was founded in 1878 and is headquartered in Stockholm, Sweden.