Commercial Metals (NYSE: CMC) and ArcelorMittal (NYSE:MT) are both mid-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.
This is a summary of current ratings and price targets for Commercial Metals and ArcelorMittal, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Commercial Metals currently has a consensus target price of $21.25, suggesting a potential upside of 9.09%. ArcelorMittal has a consensus target price of $31.07, suggesting a potential upside of 8.64%. Given Commercial Metals’ higher possible upside, equities analysts clearly believe Commercial Metals is more favorable than ArcelorMittal.
Commercial Metals pays an annual dividend of $0.48 per share and has a dividend yield of 2.5%. ArcelorMittal does not pay a dividend. Commercial Metals pays out 120.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility and Risk
Commercial Metals has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, ArcelorMittal has a beta of 2.1, meaning that its share price is 110% more volatile than the S&P 500.
This table compares Commercial Metals and ArcelorMittal’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
90.4% of Commercial Metals shares are held by institutional investors. Comparatively, 3.6% of ArcelorMittal shares are held by institutional investors. 1.3% of Commercial Metals shares are held by company insiders. Comparatively, 0.1% of ArcelorMittal shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Commercial Metals and ArcelorMittal’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Commercial Metals||$4.82 billion||0.47||$306.06 million||$0.40||48.70|
|ArcelorMittal||$61.98 billion||0.47||$7.47 billion||$3.33||8.59|
ArcelorMittal has higher revenue and earnings than Commercial Metals. ArcelorMittal is trading at a lower price-to-earnings ratio than Commercial Metals, indicating that it is currently the more affordable of the two stocks.
ArcelorMittal beats Commercial Metals on 11 of the 16 factors compared between the two stocks.
Commercial Metals Company Profile
Commercial Metals Company, together with its subsidiaries, manufactures, recycles and markets steel and metal products, related materials and services through a network. The Company’s Americas Recycling segment processes scrap metals for use as a raw material by manufacturers of new metal products. The Americas Mills segment consists of steel mills, commonly referred to as minimills that produce reinforcing bar (rebar), angles, flats and rounds. Its Americas Fabrication segment consists of its steel fabrication facilities that bend, weld, cut and fabricate steel, primarily rebar. Its International Mill segment consists of its mill, recycling and fabrication operations located in Poland. Its International Marketing and Distribution segment includes international operations for the sales, distribution and processing of primary and secondary metals, fabricated metals, semi-finished, long and flat steel products, and other industrial products.
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).
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