Analyzing Ryerson (NYSE:RYZ) and Titan Machinery (NASDAQ:TITN)

Titan Machinery (NASDAQ:TITN) and Ryerson (NYSE:RYZ) are both small-cap industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Profitability

This table compares Titan Machinery and Ryerson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Titan Machinery	-2.46%	-9.17%	-3.20%
Ryerson	-0.56%	-0.62%	-0.21%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Titan Machinery and Ryerson, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Titan Machinery	1	0	1	0	2.00
Ryerson	1	2	0	0	1.67

Titan Machinery currently has a consensus price target of $29.00, suggesting a potential upside of 23.46%. Given Titan Machinery’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Titan Machinery is more favorable than Ryerson.

Institutional & Insider Ownership

78.4% of Titan Machinery shares are held by institutional investors. Comparatively, 94.8% of Ryerson shares are held by institutional investors. 10.8% of Titan Machinery shares are held by insiders. Comparatively, 6.6% of Ryerson 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.

Earnings and Valuation

This table compares Titan Machinery and Ryerson”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Titan Machinery	$2.43 billion	0.23	-$54.17 million	($2.49)	-9.43
Ryerson	$4.57 billion	0.27	-$56.40 million	($1.24)	-19.25

Titan Machinery has higher earnings, but lower revenue than Ryerson. Ryerson is trading at a lower price-to-earnings ratio than Titan Machinery, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Titan Machinery has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, Ryerson has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500.

Summary

Ryerson beats Titan Machinery on 8 of the 14 factors compared between the two stocks.

About Titan Machinery

Titan Machinery Inc. owns and operates a network of full service agricultural and construction equipment stores in the United States, Europe, and Australia. It operates through four segments: Agriculture, Construction, Europe, and Australia. The company sells new and used equipment, including agricultural and construction equipment manufactured under the CNH Industrial family of brands, as well as equipment from various other manufacturers. Its agricultural equipment includes machinery and attachments for use in the production of food, fiber, feed grain, feed stock, and renewable energy; and home and garden applications, as well as maintenance of commercial, residential, and government properties. The company’s construction equipment comprises heavy construction machinery, light industrial machinery for commercial and residential construction, and road and highway construction machinery. It also sells maintenance and replacement parts. In addition, the company offers repair and maintenance services that include warranty repairs, off-site and on-site repair services, scheduling off-season maintenance services, and notifying customers of periodic service requirements; and training programs to customers. Further, it rents equipment; and provides ancillary equipment support services, such as equipment transportation, global positioning system signal subscriptions and other precision farming products, farm data management products, and CNH Industrial finance and insurance products. The company operates in Colorado, Idaho, Kansas, Missouri, Washington, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin, and Wyoming, the United States; Bulgaria, Germany, Romania, and Ukraine, Europe; and New South Wales, South Australia, and Victoria, Australia. Titan Machinery Inc. was founded in 1980 and is headquartered in West Fargo, North Dakota.

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.