Comparing Outokumpu (OTCMKTS:OUTKY) & Cleveland-Cliffs (NYSE:CLF)

Outokumpu (OTCMKTS:OUTKY) and Cleveland-Cliffs (NYSE:CLF) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Outokumpu and Cleveland-Cliffs, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Outokumpu	1	4	1	0	2.00
Cleveland-Cliffs	2	7	1	0	1.90

Cleveland-Cliffs has a consensus target price of $11.77, indicating a potential upside of 12.03%. Given Cleveland-Cliffs’ higher probable upside, analysts plainly believe Cleveland-Cliffs is more favorable than Outokumpu.

Volatility and Risk

Outokumpu has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Cleveland-Cliffs has a beta of 2, indicating that its stock price is 100% more volatile than the S&P 500.

Institutional and Insider 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 endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Outokumpu and Cleveland-Cliffs”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outokumpu	$6.19 billion	0.48	-$155.00 million	($0.16)	-19.69
Cleveland-Cliffs	$18.61 billion	0.32	-$1.48 billion	($2.34)	-4.49

Outokumpu has higher earnings, but lower revenue than Cleveland-Cliffs. Outokumpu is trading at a lower price-to-earnings ratio than Cleveland-Cliffs, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Outokumpu and Cleveland-Cliffs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Outokumpu	-2.55%	-4.00%	-2.43%
Cleveland-Cliffs	-6.42%	-15.48%	-4.61%

Summary

Outokumpu beats Cleveland-Cliffs on 7 of the 13 factors compared between the two stocks.

About Outokumpu

Outokumpu Oyj produces and sells various stainless steel products in Finland, other European countries, North America, the Asia-Pacific, and internationally. The company operates through three segments: Europe, Americas, and Ferrochrome. It offers cold rolled coils, strips, and sheets; hot rolled coils, strips, and plates; quarto plates; precision strips; and specialized components, such as welded stainless-steel I-beams, H-beams, hollow-section tubes, bent profiles, structural sections, hardened and customized press plates, suction roll shells, and blancs and disks. The company also provides stainless steel powder which includes Supra 316L, Dura 17-4PH, Ultra 904L, Therma 253MA, Dura 4116, and Ni-free austenitic stainless steel powder; and nickel-based alloys. Its products are used in various applications, including commercial kitchen, cooking, food industry, and home appliances; automotive and transportation; building and infrastructure; energy; marine; and heavy industries. The company was founded in 1910 and is headquartered in Helsinki, Finland.

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.