Gibraltar Industries (NASDAQ: ROCK) and Cliffs Natural Resources (NYSE:CLF) are both construction companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Profitability

This table compares Gibraltar Industries and Cliffs Natural Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gibraltar Industries 2.38% 10.14% 5.09%
Cliffs Natural Resources 2.44% -13.83% 7.41%

Institutional & Insider Ownership

58.3% of Cliffs Natural Resources shares are owned by institutional investors. 0.5% of Gibraltar Industries shares are owned by insiders. Comparatively, 0.5% of Cliffs Natural Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Gibraltar Industries has a beta of 1.81, meaning that its stock price is 81% more volatile than the S&P 500. Comparatively, Cliffs Natural Resources has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500.

Earnings & Valuation

This table compares Gibraltar Industries and Cliffs Natural Resources’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gibraltar Industries $958.80 million 0.98 $109.22 million $0.71 41.69
Cliffs Natural Resources $2.34 billion 0.87 $480.50 million $0.22 31.18

Cliffs Natural Resources has higher revenue and earnings than Gibraltar Industries. Cliffs Natural Resources is trading at a lower price-to-earnings ratio than Gibraltar Industries, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Gibraltar Industries and Cliffs Natural Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gibraltar Industries 0 0 2 0 3.00
Cliffs Natural Resources 3 3 3 0 2.00

Gibraltar Industries presently has a consensus price target of $34.50, suggesting a potential upside of 16.55%. Cliffs Natural Resources has a consensus price target of $8.00, suggesting a potential upside of 16.62%. Given Cliffs Natural Resources’ higher possible upside, analysts plainly believe Cliffs Natural Resources is more favorable than Gibraltar Industries.

About Gibraltar Industries

Gibraltar Industries, Inc. is a manufacturer and distributor of building products for industrial, transportation infrastructure, residential housing, renewable energy and resource conservation markets. The Company’s segments include Residential Products; Industrial and Infrastructure Products, and Renewable Energy and Conservation. The Residential Products segment services residential housing construction and residential repair and remodeling activity with products including roof and foundation ventilation products, rain dispersion products and roof ventilation accessories. The Industrial and Infrastructure Products segment focuses on a range of markets, including industrial and commercial construction, automotive, airports and energy and power generation markets with products. The Renewable Energy and Conservation segment focuses on the design, engineering, manufacturing and installation of solar racking systems and commercial, institutional and retail greenhouse structures.

About Cliffs Natural Resources

Cleveland-Cliffs Inc, formerly Cliffs Natural Resources Inc., is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. The Company is a producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel companies in the United States, Canada and Mexico. Its Asia Pacific Iron Ore operations are located in Western Australia and consist of its Koolyanobbing operation. The Koolyanobbing operations serve the Asian iron ore markets with direct-shipped fines and lump ore. In addition, the Company operates an iron ore mining complex in Western Australia. In the United States, the Company owned four operational iron ore mines and one indefinitely idled mine.

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