Critical Comparison: ArcelorMittal (NYSE:MT) versus General Steel (OTCMKTS:GSIH)

ArcelorMittal (NYSE:MT) and General Steel (OTCMKTS:GSIH) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Institutional and Insider Ownership

9.3% of ArcelorMittal shares are owned by institutional investors. 0.1% of ArcelorMittal shares are owned by company insiders. Comparatively, 53.3% of General Steel shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

ArcelorMittal has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500. Comparatively, General Steel has a beta of -1.15, suggesting that its share price is 215% less volatile than the S&P 500.

Earnings and Valuation

This table compares ArcelorMittal and General Steel”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ArcelorMittal	$62.44 billion	0.67	$1.34 billion	$3.36	16.06
General Steel	N/A	N/A	N/A	N/A	N/A

ArcelorMittal has higher revenue and earnings than General Steel.

Analyst Recommendations

This is a summary of recent ratings and price targets for ArcelorMittal and General Steel, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ArcelorMittal	0	6	5	0	2.45
General Steel	0	0	0	0	0.00

ArcelorMittal currently has a consensus target price of $40.98, suggesting a potential downside of 24.06%. Given ArcelorMittal’s stronger consensus rating and higher probable upside, equities research analysts plainly believe ArcelorMittal is more favorable than General Steel.

Profitability

This table compares ArcelorMittal and General Steel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ArcelorMittal	4.23%	4.94%	2.84%
General Steel	N/A	N/A	N/A

Summary

ArcelorMittal beats General Steel on 9 of the 10 factors compared between the two stocks.

About ArcelorMittal

ArcelorMittal S.A., together with its subsidiaries, operates as integrated steel and mining companies in the United States, Europe, and internationally. It offers semi-finished flat products, including slabs; finished flat products comprising plates, hot- and cold-rolled coils and sheets, hot-dipped and electro-galvanized coils and sheets, tinplate, and color coated coils and sheets; semi-finished long products, such as blooms and billets; finished long products consisting of bars, wire-rods, structural sections, rails, sheet piles, and wire-products; and seamless and welded pipes and tubes. The company also provides mining products, such as iron ore lumps, fines, concentrates, pellets, and sinter feeds; and coking coal. It sells its products to various customers in the automotive, appliance, engineering, construction, energy, and machinery industries through a centralized marketing organization, as well as distributors. The company has iron ore mining activities in Brazil, Bosnia, Canada, Liberia, Mexico, South Africa, and Ukraine. ArcelorMittal S.A. was founded in 1976 and is headquartered in Luxembourg City, Luxembourg.

About General Steel

General Steel Holdings, Inc. engages in the business of cell research, development, storage, and cell culture service in the People's Republic of China. General Steel Holdings, Inc. was incorporated in 2002 and is headquartered in Beijing, the People's Republic of China.