ArcelorMittal SA (NYSE: MT) and Nucor (NYSE:NUE) are both large-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for ArcelorMittal SA and Nucor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArcelorMittal SA 1 2 10 0 2.69
Nucor 0 6 9 0 2.60

ArcelorMittal SA presently has a consensus price target of $31.07, suggesting a potential upside of 6.66%. Nucor has a consensus price target of $67.44, suggesting a potential upside of 13.36%. Given Nucor’s higher probable upside, analysts clearly believe Nucor is more favorable than ArcelorMittal SA.

Earnings and Valuation

This table compares ArcelorMittal SA and Nucor’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ArcelorMittal SA $61.98 billion 0.48 $7.47 billion $3.33 8.75
Nucor $18.24 billion 1.04 $2.67 billion $3.44 17.29

ArcelorMittal SA has higher revenue and earnings than Nucor. ArcelorMittal SA is trading at a lower price-to-earnings ratio than Nucor, indicating that it is currently the more affordable of the two stocks.

Dividends

Nucor pays an annual dividend of $1.51 per share and has a dividend yield of 2.5%. ArcelorMittal SA does not pay a dividend. Nucor pays out 43.9% of its earnings in the form of a dividend. Nucor has increased its dividend for 43 consecutive years.

Volatility and Risk

ArcelorMittal SA has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500. Comparatively, Nucor has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.

Insider & Institutional Ownership

3.6% of ArcelorMittal SA shares are held by institutional investors. Comparatively, 74.8% of Nucor shares are held by institutional investors. 0.1% of ArcelorMittal SA shares are held by insiders. Comparatively, 0.7% of Nucor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares ArcelorMittal SA and Nucor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ArcelorMittal SA 7.63% 16.12% 6.60%
Nucor N/A N/A N/A

Summary

ArcelorMittal SA beats Nucor on 9 of the 17 factors compared between the two stocks.

About ArcelorMittal SA

ArcelorMittal S.A. (ArcelorMittal) is a holding company. The Company, together with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia and Africa. ArcelorMittal operates through five segments, which include NAFTA; Europe; Brazil; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA segment produces flat, long and tubular products. The Brazil segment includes the flat operations of Brazil, and the long and tubular operations of Brazil and neighboring countries. The Europe segment is the flat steel producer in Europe. The ACIS segment produces a combination of flat, long products and tubular products. The Mining segment comprises all mines owned by ArcelorMittal in the Americas, Asia, Europe and Africa. It produces a range of finished and semi-finished steel products (semis).

About Nucor

Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

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