Algoma Steel Group (NASDAQ:ASTLW) versus Steel Dynamics (NASDAQ:STLD) Critical Contrast

Steel Dynamics (NASDAQ:STLD) and Algoma Steel Group (NASDAQ:ASTLW) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.

Profitability

This table compares Steel Dynamics and Algoma Steel Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Steel Dynamics	11.10%	22.89%	13.44%
Algoma Steel Group	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current ratings for Steel Dynamics and Algoma Steel Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Steel Dynamics	1	5	1	0	2.00
Algoma Steel Group	0	0	0	0	N/A

Steel Dynamics currently has a consensus target price of $138.14, indicating a potential upside of 18.37%. Given Steel Dynamics’ higher possible upside, equities analysts plainly believe Steel Dynamics is more favorable than Algoma Steel Group.

Valuation & Earnings

This table compares Steel Dynamics and Algoma Steel Group’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Steel Dynamics	$18.80 billion	0.96	$2.45 billion	$14.56	8.02
Algoma Steel Group	$2.62 billion	N/A	N/A	N/A	N/A

Steel Dynamics has higher revenue and earnings than Algoma Steel Group.

Institutional & Insider Ownership

82.4% of Steel Dynamics shares are owned by institutional investors. 6.0% of Steel Dynamics shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Steel Dynamics pays an annual dividend of $1.84 per share and has a dividend yield of 1.6%. Algoma Steel Group pays an annual dividend of $0.20 per share and has a dividend yield of 13.2%. Steel Dynamics pays out 12.6% of its earnings in the form of a dividend. Steel Dynamics has raised its dividend for 12 consecutive years.

Summary

Steel Dynamics beats Algoma Steel Group on 9 of the 11 factors compared between the two stocks.

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.

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.