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

Insider and Institutional Ownership

92.8% of Carpenter Technology Corporation shares are held by institutional investors. Comparatively, 3.6% of ArcelorMittal shares are held by institutional investors. 3.6% of Carpenter Technology Corporation shares are held by company insiders. Comparatively, 0.1% of ArcelorMittal shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Carpenter Technology Corporation and ArcelorMittal’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carpenter Technology Corporation $1.80 billion 1.14 $213.50 million $1.00 43.88
ArcelorMittal $61.98 billion 0.44 $7.47 billion $3.33 8.06

ArcelorMittal has higher revenue and earnings than Carpenter Technology Corporation. ArcelorMittal is trading at a lower price-to-earnings ratio than Carpenter Technology Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Carpenter Technology Corporation and ArcelorMittal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carpenter Technology Corporation 2.61% 4.48% 1.83%
ArcelorMittal 5.50% 10.52% 4.58%

Analyst Ratings

This is a summary of current recommendations and price targets for Carpenter Technology Corporation and ArcelorMittal, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carpenter Technology Corporation 0 2 3 0 2.60
ArcelorMittal 1 1 11 0 2.77

Carpenter Technology Corporation currently has a consensus target price of $43.40, indicating a potential downside of 1.09%. ArcelorMittal has a consensus target price of $31.90, indicating a potential upside of 18.82%. Given ArcelorMittal’s stronger consensus rating and higher possible upside, analysts clearly believe ArcelorMittal is more favorable than Carpenter Technology Corporation.

Dividends

Carpenter Technology Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.6%. ArcelorMittal does not pay a dividend. Carpenter Technology Corporation pays out 72.0% of its earnings in the form of a dividend.

Risk & Volatility

Carpenter Technology Corporation has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500. Comparatively, ArcelorMittal has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500.

Summary

ArcelorMittal beats Carpenter Technology Corporation on 11 of the 16 factors compared between the two stocks.

Carpenter Technology Corporation Company Profile

Carpenter Technology Corporation is engaged in the manufacturing, fabrication and distribution of specialty metals. The Company’s segments include Specialty Alloys Operations (SAO) and Performance Engineered Products (PEP). Its SAO segment consists of alloy and stainless steel manufacturing operations. Its PEP segment includes the Dynamet titanium business, the Carpenter Powder Products business, the Amega West business, the Specialty Steel Supply business and the Latrobe and Mexico distribution businesses. It develops, manufactures and distributes cast/wrought and powder metal stainless steels, and special alloys, including high temperature (iron-nickel-cobalt base), stainless, corrosion resistant, controlled expansion alloys, ultra-high strength and implantable alloys, tool and die steels and other specialty metals, as well as cast/wrought titanium alloys. The Company manufactures and rents down-hole drilling tools and components used in the oil and gas industry.

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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