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

Institutional and Insider Ownership

3.6% of ArcelorMittal shares are held by institutional investors. Comparatively, 90.2% of SunCoke Energy shares are held by institutional investors. 0.1% of ArcelorMittal shares are held by insiders. Comparatively, 3.9% of SunCoke Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for ArcelorMittal and SunCoke Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArcelorMittal 1 1 11 0 2.77
SunCoke Energy 0 0 1 0 3.00

ArcelorMittal presently has a consensus target price of $31.90, suggesting a potential upside of 16.35%. SunCoke Energy has a consensus target price of $11.00, suggesting a potential upside of 25.43%. Given SunCoke Energy’s stronger consensus rating and higher probable upside, analysts plainly believe SunCoke Energy is more favorable than ArcelorMittal.

Profitability

This table compares ArcelorMittal and SunCoke Energy’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%
SunCoke Energy -0.01% 3.27% 0.90%

Risk and Volatility

ArcelorMittal has a beta of 2.1, suggesting that its stock price is 110% more volatile than the S&P 500. Comparatively, SunCoke Energy has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Valuation and Earnings

This table compares ArcelorMittal and SunCoke Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ArcelorMittal $61.98 billion 0.45 $7.47 billion $3.33 8.23
SunCoke Energy $1.25 billion 0.45 $226.00 million N/A N/A

ArcelorMittal has higher revenue and earnings than SunCoke Energy.

Summary

ArcelorMittal beats SunCoke Energy on 8 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).

SunCoke Energy Company Profile

SunCoke Energy, Inc. is a producer of coke in the Americas. The Company’s segments include Domestic Coke, Brazil Coke, Coal Logistics, and Corporate and Other. The Domestic Coke segment consists of its Jewell Coke Company, L.P. (Jewell), Indiana Harbor Coke Company (Indiana Harbor), Haverhill Coke Company LLC (Haverhill), Gateway Energy and Coke Company, LLC (Granite City) and Middletown Coke Company, LLC (Middletown) cokemaking and heat recovery operations. The Brazil Coke segment consists of its operations in Vitoria, Brazil, where the Company operate a cokemaking facility, ArcelorMittal Brasil S.A. The Coal Logistics segment consists of its Convent Marine Terminal (CMT), Kanawha River Terminals, LLC (KRT), SunCoke Lake Terminal, LLC (Lake Terminal) and Dismal River Terminal, LLC (DRT) coal handling and/or mixing service operations. It designs, develops, builds, owns and operates five cokemaking facilities in the United States, as of December 31, 2016.

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