Horsehead (OTCMKTS: ZINCQ) and Peabody Energy (OTCMKTS:BTUUQ) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Valuation and Earnings

This table compares Horsehead and Peabody Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Horsehead N/A N/A N/A ($13.24) 0.00
Peabody Energy N/A N/A N/A ($10.10) N/A

Horsehead is trading at a lower price-to-earnings ratio than Peabody Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Horsehead and Peabody Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horsehead 0 0 0 0 N/A
Peabody Energy 0 3 1 0 2.25

Peabody Energy has a consensus price target of $32.00, indicating a potential upside of Infinity. Given Peabody Energy’s higher possible upside, analysts clearly believe Peabody Energy is more favorable than Horsehead.

Profitability

This table compares Horsehead and Peabody Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horsehead -35.52% N/A -37.34%
Peabody Energy -12.92% -179.69% -6.22%

Insider and Institutional Ownership

0.0% of Peabody Energy shares are held by institutional investors. 1.3% of Peabody Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Peabody Energy beats Horsehead on 7 of the 8 factors compared between the two stocks.

Horsehead Company Profile

Horsehead Holding Corp. is a producer of zinc and nickel-based products sold primarily to customers throughout the United States and Canada. The Company is also a recycler of electric arc furnace (EAF) dust in the United States and a recycler of hazardous and non-hazardous waste for the specialty steel industry. It operates in three segments, which include Horsehead, Zochem and INMETCO. Horsehead is engaged in producing zinc metal and recycling of EAF dust. Zochem is engaged in producing zinc oxide in North America. INMETCO is engaged in recycling of nickel-bearing waste generated by the stainless and specialty steel producers, and recycling of nickel-cadmium and other types of batteries in North America. The Company’s products are used in a range of applications, including in the galvanizing of sheet and fabricated steel products, as components in rubber tires, alkaline batteries, paint, chemicals and pharmaceuticals and as a remelt alloy in the production of stainless steel.

Peabody Energy Company Profile

Peabody Energy Corporation is a coal company, which is engaged in the mining of thermal coal for sale primarily to electric utilities and metallurgical coal for sale to industrial customers. Its mining operations are located in the United States and Australia. Its segments are Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, Trading and Brokerage, and Corporate and Other. It also markets and brokers coal from other coal producers, both as principal and agent, and trades coal and freight-related contracts through trading and business offices in Australia, China, Germany, India, Indonesia, the United Kingdom and the United States. Its other energy-related commercial activities include participating in operations of a mine-mouth coal-fueled generating plant, managing its coal reserve and real estate holdings, evaluating Btu Conversion projects and supporting the development of clean coal technologies.

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