ArcelorMittal (NYSE: MT) and Mechel PAO (NYSE:MTL) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Profitability

This table compares ArcelorMittal and Mechel PAO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ArcelorMittal 5.50% 10.52% 4.58%
Mechel PAO N/A N/A N/A

Institutional & Insider Ownership

9.3% of ArcelorMittal shares are held by institutional investors. Comparatively, 8.4% of Mechel PAO shares are held by institutional investors. 0.1% of ArcelorMittal shares are held by insiders. Comparatively, 36.3% of Mechel PAO shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for ArcelorMittal and Mechel PAO, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArcelorMittal 1 1 11 0 2.77
Mechel PAO 1 0 0 0 1.00

ArcelorMittal presently has a consensus target price of $31.90, indicating a potential upside of 22.85%. Given ArcelorMittal’s stronger consensus rating and higher possible upside, equities research analysts clearly believe ArcelorMittal is more favorable than Mechel PAO.

Valuation & Earnings

This table compares ArcelorMittal and Mechel PAO’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ArcelorMittal $61.98 billion 0.43 $7.47 billion $3.33 7.80
Mechel PAO $9.39 billion 0.11 $2.43 billion N/A N/A

ArcelorMittal has higher revenue and earnings than Mechel PAO.

Risk and Volatility

ArcelorMittal has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500. Comparatively, Mechel PAO has a beta of -1.08, indicating that its share price is 208% less volatile than the S&P 500.

Summary

ArcelorMittal beats Mechel PAO on 12 of the 13 factors compared between the two stocks.

ArcelorMittal Company Profile

ArcelorMittal S.A. (ArcelorMittal) is a holding company. The Company, together with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia and Africa. ArcelorMittal operates through five segments, which include NAFTA; Europe; Brazil; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA segment produces flat, long and tubular products. The Brazil segment includes the flat operations of Brazil, and the long and tubular operations of Brazil and neighboring countries. The Europe segment is the flat steel producer in Europe. The ACIS segment produces a combination of flat, long products and tubular products. The Mining segment comprises all mines owned by ArcelorMittal in the Americas, Asia, Europe and Africa. It produces a range of finished and semi-finished steel products (semis).

Mechel PAO Company Profile

Mechel PAO, formerly Mechel OAO, is a holding company. The Company operates in the mining, steel and power industry segments. Its segments include Steel segment, comprising production and sales of semi-finished steel products, carbon and specialty long products, carbon and stainless flat products, and value-added downstream metal products, including forgings, stampings, and hardware, and ferrosilicon; Mining segment, comprising production and sales of coal (coking and steam), and middlings, coke and chemical products, and iron ore, which supplies raw materials to the Steel and Power segments, and also sells raw materials to third parties, and Power segment, comprising generation and sales of electricity and heat power, which supplies electricity and heat power to the Steel and Mining segments, and also sells a portion of electricity and heat power to third parties. It has freight seaports in Russia on the Sea of Japan and on the Sea of Azov, and a freight river port on the Kama River.

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