ArcelorMittal (NYSE: MT) and United States Steel Corporation (NYSE:X) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Profitability

This table compares ArcelorMittal and United States Steel Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ArcelorMittal 5.50% 10.52% 4.58%
United States Steel Corporation 0.24% 6.50% 1.67%

Dividends

United States Steel Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. ArcelorMittal does not pay a dividend. United States Steel Corporation pays out 125.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

3.6% of ArcelorMittal shares are owned by institutional investors. Comparatively, 63.9% of United States Steel Corporation shares are owned by institutional investors. 0.1% of ArcelorMittal shares are owned by insiders. Comparatively, 1.0% of United States Steel Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares ArcelorMittal and United States Steel Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ArcelorMittal $61.98 billion 0.48 $7.47 billion $3.33 8.75
United States Steel Corporation $11.21 billion 0.42 $838.00 million $0.16 169.25

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

Risk & Volatility

ArcelorMittal has a beta of 2.1, suggesting that its stock price is 110% more volatile than the S&P 500. Comparatively, United States Steel Corporation has a beta of 2.89, suggesting that its stock price is 189% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for ArcelorMittal and United States Steel Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArcelorMittal 1 2 10 0 2.69
United States Steel Corporation 4 5 8 0 2.24

ArcelorMittal currently has a consensus price target of $31.07, indicating a potential upside of 6.66%. United States Steel Corporation has a consensus price target of $27.72, indicating a potential upside of 2.35%. Given ArcelorMittal’s stronger consensus rating and higher possible upside, equities analysts plainly believe ArcelorMittal is more favorable than United States Steel Corporation.

Summary

ArcelorMittal beats United States Steel Corporation on 11 of the 16 factors compared between the two stocks.

ArcelorMittal Company Profile

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).

United States Steel Corporation Company Profile

United States Steel Corporation is an integrated steel producer. The Company is engaged in producing flat-rolled and tubular products with production operations in North America and Europe. The Company operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE) and Tubular Products (Tubular). The Flat-Rolled segment includes the operating results of its integrated steel plants and equity investees in the United States involved in the production of slabs, rounds, strip mill plates, sheets and tin mill products, as well as all iron ore and coke production facilities in the United States. The USSE segment includes the operating results of U. S. Steel Kosice (USSK) and its integrated steel plant and coke production facilities in Slovakia. The Tubular segment includes the operating results of its tubular production facilities, primarily in the United States and equity investees in the United States and Brazil.

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