National Steel (NYSE: SID) and Cliffs Natural Resources (NYSE:CLF) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares National Steel and Cliffs Natural Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Steel N/A N/A N/A
Cliffs Natural Resources 2.44% -13.83% 7.41%

Analyst Ratings

This is a summary of recent recommendations for National Steel and Cliffs Natural Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Steel 0 1 0 0 2.00
Cliffs Natural Resources 2 3 3 0 2.13

Cliffs Natural Resources has a consensus target price of $9.00, indicating a potential upside of 32.16%. Given Cliffs Natural Resources’ stronger consensus rating and higher possible upside, analysts clearly believe Cliffs Natural Resources is more favorable than National Steel.

Risk & Volatility

National Steel has a beta of 2.25, suggesting that its share price is 125% more volatile than the S&P 500. Comparatively, Cliffs Natural Resources has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.

Insider & Institutional Ownership

3.2% of National Steel shares are held by institutional investors. Comparatively, 58.3% of Cliffs Natural Resources shares are held by institutional investors. 0.5% of Cliffs Natural Resources shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares National Steel and Cliffs Natural Resources’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
National Steel $5.14 billion 0.82 $919.47 million $0.25 12.40
Cliffs Natural Resources $2.34 billion 0.86 $480.50 million $0.22 30.96

National Steel has higher revenue and earnings than Cliffs Natural Resources. National Steel is trading at a lower price-to-earnings ratio than Cliffs Natural Resources, indicating that it is currently the more affordable of the two stocks.

Summary

Cliffs Natural Resources beats National Steel on 9 of the 14 factors compared between the two stocks.

National Steel Company Profile

Companhia Siderurgica Nacional is a Brazil-based company engaged in the steel industry. The Company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a range of steel products, including coated galvanized flat steel and tinplate. The Company operates in five segments: Steel, Mining, Cement, Logistics and Energy. The Steel segment focuses on the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel, with operations in Brazil, the United States, Portugal and Germany. The Mining segment encompasses the activities of iron ore and tin mining. The Cement segment is responsible for the cement production, distribution and sale operations. The Logistics segment manages port terminal for containers, as well as railway networks. The Energy segment includes generation of electric power. The Company is controlled by Vicunha Acos SA.

Cliffs Natural Resources Company Profile

Cleveland-Cliffs Inc, formerly Cliffs Natural Resources Inc., is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. The Company is a producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel companies in the United States, Canada and Mexico. Its Asia Pacific Iron Ore operations are located in Western Australia and consist of its Koolyanobbing operation. The Koolyanobbing operations serve the Asian iron ore markets with direct-shipped fines and lump ore. In addition, the Company operates an iron ore mining complex in Western Australia. In the United States, the Company owned four operational iron ore mines and one indefinitely idled mine.

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