Cleveland-Cliffs (NYSE:CLF – Get Free Report) and Salzgitter (OTCMKTS:SZGPY – Get Free Report) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.
Insider & Institutional Ownership
67.7% of Cleveland-Cliffs shares are owned by institutional investors. 1.0% of Cleveland-Cliffs shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Risk and Volatility
Cleveland-Cliffs has a beta of 2.08, indicating that its share price is 108% 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.
Dividends
Analyst Ratings
This is a summary of recent recommendations for Cleveland-Cliffs and Salzgitter, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cleveland-Cliffs | 2 | 8 | 1 | 0 | 1.91 |
| Salzgitter | 0 | 3 | 4 | 0 | 2.57 |
Cleveland-Cliffs currently has a consensus price target of $12.85, indicating a potential downside of 0.73%. Given Cleveland-Cliffs’ higher probable upside, analysts clearly believe Cleveland-Cliffs is more favorable than Salzgitter.
Valuation & Earnings
This table compares Cleveland-Cliffs and Salzgitter”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cleveland-Cliffs | $18.90 billion | 0.39 | -$1.48 billion | ($2.34) | -5.53 |
| Salzgitter | $10.16 billion | 0.38 | -$83.95 million | $0.09 | 78.28 |
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.
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% | 1.02% | 0.43% |
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.
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