Horsehead (ZINCQ) versus Peabody Energy (BTU) Critical Survey

Horsehead (OTCMKTS: ZINCQ) and Peabody Energy (NYSE:BTU) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Institutional and Insider Ownership

95.1% of Peabody Energy shares are held by institutional investors. 1.3% of Peabody Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Horsehead and Peabody Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Horsehead N/A N/A N/A ($13.24) 0.00
Peabody Energy $4.72 billion 0.75 -$729.30 million N/A N/A

Horsehead has higher earnings, but lower revenue than Peabody Energy.

Profitability

This table compares Horsehead and Peabody Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horsehead -35.52% N/A -37.34%
Peabody Energy 4.60% 19.92% 2.74%

Analyst Recommendations

This is a summary of recent ratings for Horsehead and Peabody Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horsehead 0 0 0 0 N/A
Peabody Energy 0 2 7 0 2.78

Peabody Energy has a consensus price target of $35.63, indicating a potential upside of 5.09%. Given Peabody Energy’s higher probable upside, analysts plainly believe Peabody Energy is more favorable than Horsehead.

Summary

Peabody Energy beats Horsehead on 8 of the 8 factors compared between the two stocks.

About Horsehead

Horsehead Holding Corp. is a producer of zinc and nickel-based products sold primarily to customers throughout the United States and Canada. The Company is also a recycler of electric arc furnace (EAF) dust in the United States and a recycler of hazardous and non-hazardous waste for the specialty steel industry. It operates in three segments, which include Horsehead, Zochem and INMETCO. Horsehead is engaged in producing zinc metal and recycling of EAF dust. Zochem is engaged in producing zinc oxide in North America. INMETCO is engaged in recycling of nickel-bearing waste generated by the stainless and specialty steel producers, and recycling of nickel-cadmium and other types of batteries in North America. The Company’s products are used in a range of applications, including in the galvanizing of sheet and fabricated steel products, as components in rubber tires, alkaline batteries, paint, chemicals and pharmaceuticals and as a remelt alloy in the production of stainless steel.

About Peabody Energy

Peabody Energy Corporation is a coal company. The Company’s segments include Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, Trading and Brokerage, and Corporate and Other. Its Powder River Basin Mining operations consist of its mines in Wyoming. Midwestern U.S. Mining operations reflect the Company’s Illinois and Indiana mining operations. Western U.S. Mining operations reflect the aggregation of the New Mexico, Arizona and Colorado mining operations. Australian Metallurgical Mining operations consist of mines in Queensland and New South Wales, Australia. Australian Thermal Mining operations consist of mines in New South Wales, Australia. Its Trading and Brokerage segment engages in the direct and brokered trading of coal and freight-related contracts through the trading and business offices. Its Corporate and Other includes selling and administrative expenses, and corporate hedging activities.

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