Analyzing SSAB (OTCMKTS:SSAAY) & Warrior Met Coal (NYSE:HCC)

SSAB (OTCMKTS:SSAAY) and Warrior Met Coal (NYSE:HCC) are both materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Volatility and Risk

SSAB has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Warrior Met Coal has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Dividends

SSAB pays an annual dividend of $0.05 per share and has a dividend yield of 0.9%. Warrior Met Coal pays an annual dividend of $0.32 per share and has a dividend yield of 0.4%. SSAB pays out 16.7% of its earnings in the form of a dividend. Warrior Met Coal pays out 7.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Warrior Met Coal has increased its dividend for 1 consecutive years.

Valuation & Earnings

This table compares SSAB and Warrior Met Coal”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SSAB	$9.84 billion	1.08	$500.98 million	$0.30	17.70
Warrior Met Coal	$1.31 billion	3.34	$57.00 million	$4.16	19.93

SSAB has higher revenue and earnings than Warrior Met Coal. SSAB 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 ratings for SSAB and Warrior Met Coal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SSAB	0	2	2	0	2.50
Warrior Met Coal	0	4	4	0	2.50

Warrior Met Coal has a consensus target price of $104.50, suggesting a potential upside of 26.04%. Given Warrior Met Coal’s higher possible upside, analysts clearly believe Warrior Met Coal is more favorable than SSAB.

Insider and Institutional Ownership

92.3% of Warrior Met Coal shares are owned by institutional investors. 2.1% of Warrior Met Coal shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SSAB	5.73%	8.18%	5.26%
Warrior Met Coal	13.05%	10.02%	7.84%

Summary

Warrior Met Coal beats SSAB on 12 of the 16 factors compared between the two stocks.

About SSAB

SSAB AB (publ) produces and sells steel products in Sweden, Finland, Rest of Europe, the United States, and internationally. It operates through five segments: SSAB Special Steels, SSAB Europe, SSAB Americas, Tibnor, and Ruukki Construction. The SSAB Special Steels segment offers quenched and tempered steels, and advanced high-strength steel products for steel and plate production. The SSAB Europe segment provides strip, heavy plate, and tubular products. The SSAB Americas segment sells heavy plates for steel and plate production. The Tibnor segment distributes a range of steel and non-ferrous metals in the Nordics and Baltics. The Ruukki Construction segment produces and sells energy-efficient building and construction solutions. It markets its steel products under the Strenx, Hardox, Docol, GreenCoat, Toolox, Armox, Duroxite, SSAB AM, SSAB Boron, SSAB Domex, SSAB Form, SSAB Laser, SSAB Weathering, Cor-Ten, and SSAB Multisteel brands. The company's products are used by customers in the heavy transport, construction and infrastructure, industrial applications, construction machinery, energy, and material handling markets. SSAB AB (publ) was founded in 1878 and is headquartered in Stockholm, Sweden.

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.