Head-To-Head Comparison: Vallourec (OTCMKTS:VLOUF) and Companhia Siderúrgica Nacional (NYSE:SID)

Vallourec (OTCMKTS:VLOUF) and Companhia Siderúrgica Nacional (NYSE:SID) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Insider & Institutional Ownership

29.0% of Vallourec shares are owned by institutional investors. 0.0% of Companhia Siderúrgica Nacional shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Vallourec and Companhia Siderúrgica Nacional’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vallourec	N/A	N/A	N/A
Companhia Siderúrgica Nacional	-0.34%	-0.79%	-0.17%

Dividends

Vallourec pays an annual dividend of $0.81 per share and has a dividend yield of 5.0%. Companhia Siderúrgica Nacional pays an annual dividend of $0.27 per share and has a dividend yield of 13.5%. Vallourec pays out 40.5% of its earnings in the form of a dividend. Companhia Siderúrgica Nacional pays out -899.7% 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. Companhia Siderúrgica Nacional is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Vallourec and Companhia Siderúrgica Nacional”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vallourec	N/A	N/A	N/A	$2.00	8.10
Companhia Siderúrgica Nacional	$9.10 billion	N/A	-$63.74 million	($0.03)	-66.64

Vallourec has higher earnings, but lower revenue than Companhia Siderúrgica Nacional. Companhia Siderúrgica Nacional is trading at a lower price-to-earnings ratio than Vallourec, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Vallourec and Companhia Siderúrgica Nacional, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vallourec	0	0	0	0	N/A
Companhia Siderúrgica Nacional	2	0	0	0	1.00

Companhia Siderúrgica Nacional has a consensus price target of $2.95, suggesting a potential upside of 47.50%. Given Companhia Siderúrgica Nacional’s higher probable upside, analysts plainly believe Companhia Siderúrgica Nacional is more favorable than Vallourec.

About Vallourec

Vallourec S.A., through its subsidiaries, provides tubular solutions for the oil and gas, industry, and energy markets in Europe, North America, South America, Asia, the Middle East, and internationally. It operates through Tubes; Mine & Forests; and Holding Companies & Other segments. The company offers seamless tubes for refineries, petrochemical facilities, and floating liquefied natural gas plants, as well as production, storage, and offloading units; VAM connections; rigid subsea line pipes and onshore rigid line pipes; and carbon steel and steel alloy tubes, hollow bars, and connections. It also provides assistance in lowering tubes, inspecting connections, and supervising assembly; thread tubes inventory management; tube inspection, maintenance, and repair services; on-site services; preparation for drilling operations; well coordination and supply services based on the drilling programs; and integrated solutions for the subsea line pipe market comprising welding, coating, insulation, bending, logistics, project management, and service agreements. In addition, the company offers tubular products for geothermal; carbon capture, utilization, and storage; and hydrogen industries. Further, it provides tubes and hollow bars, as well as circular, square, rectangular, and octagonal sections for the manufacture of cranes, construction machinery, agricultural machinery, and hydraulic cylinders; and infrastructure construction, as well as axle tubes and gearbox applications for the automotive industry. Additionally, the company is involved in the iron ore and charcoal production businesses. It serves oil service, engineering, and construction companies; distributors and industrial equipment manufacturers; and energy companies, and carbon capture and storage specialists, as well as geothermal, green hydrogen, and solar developers. Vallourec S.A. was founded in 1895 and is based in Meudon, France.

About Companhia Siderúrgica Nacional

Companhia Siderúrgica Nacional operates as an integrated steel producer in Brazil and Latin America. It operates through five segments: Steel Industry, Mining, Logistics, Energy, and Cement. The company offers flat steel products, such as hot and cold rolled, galvanized, galvalume, pre-painted, and metal sheets products; coil, sheets, and derivatives; tiles and derivatives, pipes, and profiles; long steel products; steel packaging solutions for the food industry; chemical packaging solution; and carbochemical products. It also provides steel cutting services; produces and sells cement; operates railway and port facilities; and generates electric power from its thermoelectric co-generation and hydroelectric power plants. In addition, the company explores for iron ore reserves at Casa de Pedra and Engenho mines located in the city of Congonhas; and limestone and dolomite at the Bocaina mine located in the city of Arcos in the state of Minas Gerais, Brazil, as well as produces tin. Companhia Siderúrgica Nacional was founded in 1941 and is headquartered in São Paulo, Brazil.