Worthington Steel (NYSE:WS – Get Free Report) and USA Rare Earth (NASDAQ:USAR – Get Free Report) are both mid-cap materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Worthington Steel and USA Rare Earth, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Worthington Steel | 1 | 1 | 1 | 0 | 2.00 |
| USA Rare Earth | 1 | 0 | 9 | 0 | 2.80 |
Worthington Steel presently has a consensus price target of $46.00, indicating a potential upside of 12.47%. USA Rare Earth has a consensus price target of $33.71, indicating a potential upside of 229.56%. Given USA Rare Earth’s stronger consensus rating and higher possible upside, analysts plainly believe USA Rare Earth is more favorable than Worthington Steel.
Insider and Institutional Ownership
45.4% of Worthington Steel shares are owned by institutional investors. 2.7% of Worthington Steel shares are owned by company insiders. Comparatively, 9.1% of USA Rare Earth shares are owned 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.
Valuation and Earnings
This table compares Worthington Steel and USA Rare Earth”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Worthington Steel | $3.44 billion | 0.61 | $8.50 million | ($0.61) | -67.05 |
| USA Rare Earth | $1.64 million | 1,526.52 | -$297.56 million | ($2.43) | -4.21 |
Worthington Steel has higher revenue and earnings than USA Rare Earth. Worthington Steel is trading at a lower price-to-earnings ratio than USA Rare Earth, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Worthington Steel and USA Rare Earth’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Worthington Steel | -0.56% | 7.49% | 3.14% |
| USA Rare Earth | N/A | -9.04% | -7.13% |
Risk & Volatility
Worthington Steel has a beta of 2.24, meaning that its share price is 124% more volatile than the S&P 500. Comparatively, USA Rare Earth has a beta of 2.66, meaning that its share price is 166% more volatile than the S&P 500.
Summary
USA Rare Earth beats Worthington Steel on 7 of the 13 factors compared between the two stocks.
About Worthington Steel
Worthington Steel, Inc. operates as a steel processor in North America. It offers carbon flat-rolled steel and tailor welded blanks, as well as electrical steel laminations; and aluminum tailor welded blanks. The company serves various end-markets, including automotive, heavy truck, agriculture, construction, and energy. Worthington Steel, Inc. was incorporated in 2023 and is based in Columbus, Ohio.
About USA Rare Earth
USA Rare Earth, Inc. is domestic supplier of rare earth magnets and heavy rare earth elements. It is developing a vertically integrated, domestic supply chain for rare earth element magnet production, with a facility in Stillwater, Oklahoma, and mining rights to the Round Top heavy rare earth and critical minerals deposit in West Texas. The company was founded in May 2019 and is headquartered in Stillwater, OK.
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