Ryerson (NYSE:RYZ – Get Free Report) and Global Industrial (NYSE:GIC – Get Free Report) are both small-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.
Earnings & Valuation
This table compares Ryerson and Global Industrial”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ryerson | $4.57 billion | 0.32 | -$56.40 million | ($1.24) | -22.57 |
| Global Industrial | $1.38 billion | 1.24 | $72.10 million | $2.24 | 19.96 |
Global Industrial has lower revenue, but higher earnings than Ryerson. Ryerson is trading at a lower price-to-earnings ratio than Global Industrial, indicating that it is currently the more affordable of the two stocks.
Dividends
Ryerson pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Global Industrial pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Ryerson pays out -60.5% of its earnings in the form of a dividend. Global Industrial pays out 50.0% 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. Global Industrial has raised its dividend for 9 consecutive years. Ryerson is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
94.8% of Ryerson shares are held by institutional investors. Comparatively, 31.2% of Global Industrial shares are held by institutional investors. 6.6% of Ryerson shares are held by insiders. Comparatively, 64.5% of Global Industrial shares are held by 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.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Ryerson and Global Industrial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ryerson | 1 | 2 | 0 | 0 | 1.67 |
| Global Industrial | 0 | 3 | 0 | 0 | 2.00 |
Global Industrial has a consensus price target of $39.00, suggesting a potential downside of 12.77%. Given Global Industrial’s stronger consensus rating and higher possible upside, analysts clearly believe Global Industrial is more favorable than Ryerson.
Volatility and Risk
Ryerson has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500. Comparatively, Global Industrial has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.
Profitability
This table compares Ryerson and Global Industrial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ryerson | -0.56% | -0.62% | -0.21% |
| Global Industrial | 6.06% | 21.49% | 11.60% |
Summary
Global Industrial beats Ryerson on 10 of the 15 factors compared between the two stocks.
About Ryerson
Ryerson Holding Corporation, together with its subsidiaries, processes and distributes industrial metals in the United States, Canada, Mexico, and China. It offers a line of products in carbon steel, stainless steel, alloy steels, and aluminum, as well as nickel and red metals in various shapes and forms, including coils, sheets, rounds, hexagons, square and flat bars, plates, structural, and tubing. The company also provides various processing services, such as bending, beveling, blanking, blasting, burning, cutting-to-length, drilling, embossing, flattening, forming, grinding, laser cutting, machining, notching, painting, perforating, polishing, punching, rolling, sawing, scribing, shearing, slitting, stamping, tapping, threading, welding, or other techniques to process materials. It serves various industries, including commercial ground transportation, metal fabrication and machine shops, industrial machinery and equipment manufacturing, consumer durable equipment, HVAC manufacturing, construction equipment manufacturing, food processing and agricultural equipment manufacturing, and oil and gas. The company was founded in 1842 and is headquartered in Chicago, Illinois.
About Global Industrial
Global Industrial Company operates as an industrial distributor of various industrial and maintenance, repair, and operation (MRO) products in North America. It offers storage and shelving, safety and security, carts and trucks, HVAC and fans, furniture and decor, material handling, janitorial and facility maintenance, workbenches and shop desks, tools and instruments, plumbing and pumps, office and school supplies, packaging and shipping, lighting and electrical, foodservice and retail, medical and laboratory, motors and power transmission, building supplies, machining, fasteners and hardware, vehicle maintenance, and raw materials. The company offers industrial and MRO products under the Global, GlobalIndustrial.com, Nexel, Paramount, Interion, and Absocold trademarks. It serves businesses; state, local, and private educational organizations; and government entities through relationship marketers, e-commerce sites, signature campaigns, and catalogs. The company was formerly known as Systemax Inc. Global Industrial Company was founded in 1949 and is headquartered in Port Washington, New York.
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