Reviewing Warrior Met Coal (NYSE:HCC) & China Shenhua Energy (OTCMKTS:CSUAY)

China Shenhua Energy (OTCMKTS:CSUAY) and Warrior Met Coal (NYSE:HCC) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Institutional and Insider Ownership

92.3% of Warrior Met Coal shares are owned by institutional investors. 2.1% of Warrior Met Coal shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

China Shenhua Energy has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, Warrior Met Coal has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Profitability

This table compares China Shenhua Energy and Warrior Met Coal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Shenhua Energy	17.88%	10.69%	7.91%
Warrior Met Coal	2.87%	2.01%	1.59%

Dividends

China Shenhua Energy pays an annual dividend of $1.48 per share and has a dividend yield of 7.2%. Warrior Met Coal pays an annual dividend of $0.32 per share and has a dividend yield of 0.4%. China Shenhua Energy pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Warrior Met Coal pays out 47.8% of its earnings in the form of a dividend. Warrior Met Coal has increased its dividend for 1 consecutive years.

Earnings and Valuation

This table compares China Shenhua Energy and Warrior Met Coal”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Shenhua Energy	$47.07 billion	2.18	$8.68 billion	$1.48	13.96
Warrior Met Coal	$1.53 billion	2.67	$250.60 million	$0.67	115.41

China Shenhua Energy has higher revenue and earnings than Warrior Met Coal. China Shenhua Energy is trading at a lower price-to-earnings ratio than Warrior Met Coal, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for China Shenhua Energy and Warrior Met Coal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Shenhua Energy	1	1	0	0	1.50
Warrior Met Coal	0	4	2	1	2.57

China Shenhua Energy currently has a consensus price target of $32.50, suggesting a potential upside of 57.35%. Warrior Met Coal has a consensus price target of $71.50, suggesting a potential downside of 7.53%. Given China Shenhua Energy’s higher probable upside, analysts plainly believe China Shenhua Energy is more favorable than Warrior Met Coal.

Summary

Warrior Met Coal beats China Shenhua Energy on 10 of the 18 factors compared between the two stocks.

About China Shenhua Energy

China Shenhua Energy Company Limited, together with its subsidiaries, engages in the production and sale of coal and power; railway, port, and shipping transportation; and coal-to-olefins businesses in the People's Republic of China and internationally. It operates through six segments: Coal, Power Generation, Railway, Port, Shipping, and Coal Chemical. The Coal segment produces coal from surface and underground mines; and sells coal to power plants and metallurgical and coal chemical producers. The Power segment generates electric power through thermal, wind, water, and gas; and sells electric power to power grid companies. The Railway segment provides railway transportation services. The Port segment offers loading, transportation, and storage services. The Shipping segment provides shipment transportation services. The Coal Chemical segment produces and sells methanol; and polyethylene and polypropylene, as well as other by-products. The company was incorporated in 2004 and is based in Beijing, the People's Republic of China. China Shenhua Energy Company Limited operates as a subsidiary of China Energy Investment Corporation Limited.

About Warrior Met Coal

Warrior Met Coal, Inc. produces and exports non-thermal metallurgical coal for the steel industry. It operates two underground mines located in Alabama. The company sells its metallurgical coal to a customer base of blast furnace steel producers located primarily in Europe, South America, and Asia. It also sells natural gas, which is extracted as a byproduct from coal production. Warrior Met Coal, Inc. was incorporated in 2015 and is headquartered in Brookwood, Alabama.