Eldorado Gold (NYSE:EGO – Get Free Report) and Steel Dynamics (NASDAQ:STLD – Get Free Report) are both materials companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.
Institutional and Insider Ownership
69.6% of Eldorado Gold shares are held by institutional investors. Comparatively, 82.4% of Steel Dynamics shares are held by institutional investors. 0.6% of Eldorado Gold shares are held by insiders. Comparatively, 6.6% of Steel Dynamics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Dividends
Eldorado Gold pays an annual dividend of $0.30 per share and has a dividend yield of 0.9%. Steel Dynamics pays an annual dividend of $2.12 per share and has a dividend yield of 0.8%. Eldorado Gold pays out 10.0% of its earnings in the form of a dividend. Steel Dynamics pays out 15.6% 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. Steel Dynamics has increased its dividend for 13 consecutive years. Eldorado Gold is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Eldorado Gold has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Steel Dynamics has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.
Profitability
This table compares Eldorado Gold and Steel Dynamics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eldorado Gold | 31.67% | 10.31% | 6.74% |
| Steel Dynamics | 8.82% | 21.57% | 11.61% |
Valuation and Earnings
This table compares Eldorado Gold and Steel Dynamics”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Eldorado Gold | $2.09 billion | 4.07 | $507.26 million | $3.00 | 10.87 |
| Steel Dynamics | $18.18 billion | 1.99 | $1.19 billion | $13.55 | 18.75 |
Steel Dynamics has higher revenue and earnings than Eldorado Gold. Eldorado Gold is trading at a lower price-to-earnings ratio than Steel Dynamics, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings for Eldorado Gold and Steel Dynamics, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eldorado Gold | 1 | 6 | 6 | 2 | 2.60 |
| Steel Dynamics | 0 | 4 | 9 | 0 | 2.69 |
Eldorado Gold currently has a consensus target price of $46.57, indicating a potential upside of 42.79%. Steel Dynamics has a consensus target price of $275.17, indicating a potential upside of 8.33%. Given Eldorado Gold’s higher probable upside, analysts plainly believe Eldorado Gold is more favorable than Steel Dynamics.
Summary
Steel Dynamics beats Eldorado Gold on 12 of the 18 factors compared between the two stocks.
About Eldorado Gold
Eldorado Gold Corporation, together with its subsidiaries, engages in the mining, exploration, development, and sale of mineral products primarily in Turkey, Canada, Greece, and Romania. The company primarily produces gold, as well as silver, lead, and zinc. It holds a 100% interest in the Kisladag and Efemçukuru mines located in Turkey; Lamaque complex located in Canada; and Olympias, Stratoni, Skouries, Perama Hill, and Sapes gold mines located in Greece, as well as the 80.5% interest in Certej development projects located in Romania. The company was formerly known as Eldorado Corporation Ltd. and changed its name to Eldorado Gold Corporation in April 1996. Eldorado Gold Corporation was incorporated in 1996 and is headquartered in Vancouver, Canada.
About Steel Dynamics
Steel Dynamics, Inc., together with its subsidiaries, operates as a steel producer and metal recycler in the United States. The Steel Operations segment offers hot rolled, cold rolled, and coated steel products; parallel flange beams and channel sections, flat bars, large unequal leg angles, and reinforcing steel bars, as well as standard strength carbon, intermediate alloy hardness, and premium grade rail products; engineered special-bar-quality products, merchant-bar-quality products, and other engineered round steel bars; channels, angles, flats, merchant rounds, and reinforcing steel bars; and specialty shapes and light structural steel products. This segment also engages in turning, polishing, straightening, chamfering, precision saw-cutting, and heat treating of bar products. Its products are used in construction, automotive, manufacturing, transportation, heavy and agriculture equipment, and pipe and tube markets. The Metals Recycling Operations segment is involved in the ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage, and scrap management services. Its ferrous products include heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast-iron products; and nonferrous products comprise aluminum, brass, copper, stainless steel, and other nonferrous metals. The Steel Fabrication Operations segment produces steel non-residential building components, such as steel joists, girders, trusses, and steel deck products for non-residential steel fabricators, metal building companies, general construction contractors, developers, owners, brokers, and governmental entities, as well as e-commerce warehouses, data centers, metal buildings, and education and commercial building projects. The Aluminum Operations segment offers recycled aluminum flat rolled products. The company also exports its products. Steel Dynamics, Inc. was founded in 1993 and is headquartered in Fort Wayne, Indiana.
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