Outokumpu (OTCMKTS:OUTKY) and Cleveland-Cliffs (NYSE:CLF) Head to Head Comparison

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

Risk and Volatility

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

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 endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Outokumpu pays an annual dividend of $0.02 per share and has a dividend yield of 0.6%. Cleveland-Cliffs pays an annual dividend of $0.24 per share and has a dividend yield of 2.3%. Outokumpu pays out -13.3% of its earnings in the form of a dividend. Cleveland-Cliffs pays out -10.3% 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.

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	-2.32%	-3.67%	-2.23%
Cleveland-Cliffs	-6.42%	-15.48%	-4.61%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outokumpu	$6.19 billion	0.48	-$155.00 million	($0.15)	-21.11
Cleveland-Cliffs	$18.90 billion	0.31	-$1.48 billion	($2.34)	-4.40

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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Outokumpu and Cleveland-Cliffs, as reported by MarketBeat.com.

	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 14.42%. Given Cleveland-Cliffs’ higher possible upside, analysts clearly believe Cleveland-Cliffs is more favorable than Outokumpu.

Summary

Outokumpu beats Cleveland-Cliffs on 8 of the 15 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.