Analyzing Algoma Steel Group (NASDAQ:ASTL) & ThyssenKrupp (OTCMKTS:TKAMY)
by Mitch Edgeman · The Markets DailyAlgoma Steel Group (NASDAQ:ASTL – Get Free Report) and ThyssenKrupp (OTCMKTS:TKAMY – Get Free Report) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.
Institutional & Insider Ownership
72.0% of Algoma Steel Group shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent ratings and price targets for Algoma Steel Group and ThyssenKrupp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Algoma Steel Group | 1 | 4 | 0 | 0 | 1.80 |
| ThyssenKrupp | 2 | 1 | 1 | 2 | 2.50 |
Profitability
This table compares Algoma Steel Group and ThyssenKrupp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Algoma Steel Group | -31.27% | -15.13% | -6.51% |
| ThyssenKrupp | 2.80% | 9.15% | 3.27% |
Volatility and Risk
Algoma Steel Group has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, ThyssenKrupp has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.
Dividends
Algoma Steel Group pays an annual dividend of $0.10 per share and has a dividend yield of 2.3%. ThyssenKrupp pays an annual dividend of $0.10 per share and has a dividend yield of 0.8%. Algoma Steel Group pays out -2.1% of its earnings in the form of a dividend. ThyssenKrupp pays out 6.1% 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. Algoma Steel Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Algoma Steel Group and ThyssenKrupp”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Algoma Steel Group | $2.49 billion | 0.18 | -$62.28 million | ($4.75) | -0.92 |
| ThyssenKrupp | $36.31 billion | N/A | $514.57 million | $1.65 | 7.50 |
ThyssenKrupp has higher revenue and earnings than Algoma Steel Group. Algoma Steel Group is trading at a lower price-to-earnings ratio than ThyssenKrupp, indicating that it is currently the more affordable of the two stocks.
Summary
ThyssenKrupp beats Algoma Steel Group on 10 of the 14 factors compared between the two stocks.
About Algoma Steel Group
Algoma Steel Group Inc. produces and sells steel products primarily in North America. The company provides flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural product manufacturers, and the light manufacturing and transportation industries; and plate steel products that consist of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, and military applications. Algoma Steel Group Inc. was founded in 1901 and is headquartered in Sault Ste. Marie, Canada.
About ThyssenKrupp
thyssenkrupp AG operates as an industrial and technology company in Germany and internationally. It operates through five segments: Automotive Technology, Decarbon Technologies, Materials Services, Steel Europe, and Marine Systems. The Automotive Technology segment offers components, systems, and automation solutions for vehicle manufacturing, such as axle assembly, body in white, camshafts and electric engine components, dampers, dies, springs and stabilizers, crankshafts and conrods, steering, and undercarriages. The Decarbon Technologies segment provides slewing bearings and rings, green ammonia and methanol, chemical and cement plants, high pressure processing, and refinery services, as well as green hydrogen. The Marine System segment manufactures submarines, naval services, and naval surface vessels. The Material Services segment offers 3D-printing/additive manufacturing, alloys, infrastructure project and services, industrial minerals, logistics services, metals, nonferrous metals, plastics, rolled steel, special ores, and stainless steel. The Steel Europe segment manufactures composite materials, electrical steel, hot strips, organic coated strips and sheet, packaging steel, precision steel strip, and sheet and coated products. thyssenkrupp AG was founded in 1811 and is headquartered in Essen, Germany.