Contrasting Cleveland-Cliffs (NYSE:CLF) & Salzgitter (OTCMKTS:SZGPY)

Cleveland-Cliffs (NYSE:CLF) and Salzgitter (OTCMKTS:SZGPY) are both mid-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Cleveland-Cliffs and Salzgitter, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cleveland-Cliffs	2	9	0	0	1.82
Salzgitter	0	3	4	0	2.57

Cleveland-Cliffs presently has a consensus price target of $12.90, suggesting a potential upside of 16.02%. Given Cleveland-Cliffs’ higher probable upside, equities analysts clearly believe Cleveland-Cliffs is more favorable than Salzgitter.

Institutional and Insider Ownership

67.7% of Cleveland-Cliffs shares are owned by institutional investors. 1.0% of Cleveland-Cliffs shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Cleveland-Cliffs has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500. Comparatively, Salzgitter has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500.

Profitability

This table compares Cleveland-Cliffs and Salzgitter’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cleveland-Cliffs	-6.42%	-15.48%	-4.61%
Salzgitter	0.49%	1.00%	0.42%

Valuation & Earnings

This table compares Cleveland-Cliffs and Salzgitter”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cleveland-Cliffs	$18.61 billion	0.34	-$1.48 billion	($2.34)	-4.75
Salzgitter	$10.16 billion	0.32	-$83.95 million	$0.09	66.33

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

Summary

Salzgitter beats Cleveland-Cliffs on 8 of the 14 factors compared between the two stocks.

About Cleveland-Cliffs

Cleveland-Cliffs is the largest flat-rolled steel company and the largest iron ore pellet producer in North America. The company is vertically integrated from mining through iron making, steelmaking, rolling, finishing and downstream with hot and cold stamping of steel parts and components. The company was formerly known as Cliffs Natural Resources Inc. and changed its name to Cleveland-Cliffs Inc. in August 2017. Cleveland-Cliffs Inc. was founded in 1847 and is headquartered in Cleveland, Ohio.

About Salzgitter

Salzgitter AG, together with its subsidiaries, engages in steel and technology businesses worldwide. It operates through four segments: Steel Production, Steel Processing, Trading, and Technology. The Steel Production segment manufactures steel and special steels, such as hot-rolled wide strip, steel sheet, sections, tailored blanks, as well as scrap trading. The Steel Processing segment produces various high-grade heavy plates; and manufactures line pipes, HFI-welded tubes, and precision and stainless-steel tubes. The Trading segment operates a European sales network, as well as trading companies and agencies worldwide. The Technology segment engages in the provision of machinery and plants for the filling and packaging of beverages, as well as special machinery engineering for shoe manufacturing and elastomer production. The company also provides IT, facility management, logistics, automotive engineering, and research and development services, as well as supplies raw materials. The company was founded in 1858 and is headquartered in Salzgitter, Germany.