Head-To-Head Review: Xylem (NYSE:XYL) vs. Sims Metal Management (OTCMKTS:SMSMY)

Sims Metal Management (OTCMKTS:SMSMY) and Xylem (NYSE:XYL) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Earnings & Valuation

This table compares Sims Metal Management and Xylem”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sims Metal Management	$4.85 billion	0.61	-$12.30 million	N/A	N/A
Xylem	$9.04 billion	3.48	$890.00 million	$3.89	33.18

Xylem has higher revenue and earnings than Sims Metal Management.

Volatility & Risk

Sims Metal Management has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Xylem has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500.

Dividends

Sims Metal Management pays an annual dividend of $0.14 per share and has a dividend yield of 0.9%. Xylem pays an annual dividend of $1.60 per share and has a dividend yield of 1.2%. Xylem pays out 41.1% of its earnings in the form of a dividend. Xylem has increased its dividend for 2 consecutive years. Xylem is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

88.0% of Xylem shares are owned by institutional investors. 0.3% of Xylem shares are owned by 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Sims Metal Management and Xylem, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sims Metal Management	1	0	0	0	1.00
Xylem	0	4	9	0	2.69

Xylem has a consensus price target of $158.08, suggesting a potential upside of 22.49%. Given Xylem’s stronger consensus rating and higher possible upside, analysts clearly believe Xylem is more favorable than Sims Metal Management.

Profitability

This table compares Sims Metal Management and Xylem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sims Metal Management	N/A	N/A	N/A
Xylem	10.59%	11.11%	7.22%

Summary

Xylem beats Sims Metal Management on 14 of the 15 factors compared between the two stocks.

About Sims Metal Management

Sims Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals in Australia, Bangladesh, China, Turkey, the United States, and internationally. The company operates through six segments: North America Metals, Investment in SA Recycling, Australia/New Zealand Metals, UK Metals, Global Trading, and Sims Lifecycle Services. It is involved in the collection, processing, and trading of iron and steel secondary raw materials; and other metal alloys and residues, principally aluminum, lead, copper, zinc, and nickel bearing materials. The company also engages in the provision of environmentally responsible solutions for the disposal of post-consumer electronic products, such as information technology assets recycled for commercial customers; and environmentally responsible recycling of negative value materials, including electronic equipment. In addition, it provides secondary processing and other services comprising recycling of municipal curbside materials, stevedoring, and other sources of service. The company was founded in 1917 and is headquartered in Mascot, Australia.

About Xylem

Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions worldwide. It operates through four segments: Water Infrastructure, Applied Water, Measurement & Control Solutions, and Integrated Solutions and Services. The Water Infrastructure segment offers products, including water, storm water, and wastewater pumps; controls and systems; filtration, disinfection, and biological treatment equipment; and mobile dewatering equipment and rental services under the ADI, Flygt, Godwin, Sanitaire, Magneto, Neptune Benson, Ionpure, Leopold, Wedeco, and Xylem Vue brands. The Applied Water segment provides pumps, valves, heat exchangers, controls, and dispensing equipment systems under the Goulds Water Technology, Bell & Gossett, A-C Fire Pump, Standard Xchange, Lowara, Jabsco, Xylem Vue, and Flojet brands. The Measurement & Control Solutions segment offers smart meters, networked communication devices, data analytics, test equipment, controls, sensor devices, software and managed services, and critical infrastructure services; and software and services, including cloud-based analytics, remote monitoring and data management, leak detection, condition assessment, asset management, and pressure monitoring solutions, as well as testing equipment. This segment sells its products under the Pure Technologies, Sensus, Smith Blair, WTW, Xylem Vue, and YSI brands. The Integrated Solutions and Services segment provides maintenance services, mobile services, digital outsourced solutions, wastewater systems, environmental remediation, odor and corrosion control, filtration, reverse osmosis, ion exchange, and deionization under Aquapro, WaterOne, and Ion Pure brands. Xylem Inc. was formerly known as ITT WCO, Inc. and changed its name to Xylem Inc. in May 2011. Xylem Inc. was incorporated in 2011 and is headquartered in Washington, District of Columbia.