Analyzing Steel Dynamics (NASDAQ:STLD) & Barrick Mining (NYSE:B)

Barrick Mining (NYSE:B) and Steel Dynamics (NASDAQ:STLD) are both large-cap materials companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Risk & Volatility

Barrick Mining has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Steel Dynamics has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500.

Profitability

This table compares Barrick Mining and Steel Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barrick Mining	31.60%	16.02%	11.22%
Steel Dynamics	7.83%	18.12%	9.81%

Institutional and Insider Ownership

90.8% of Barrick Mining shares are held by institutional investors. Comparatively, 82.4% of Steel Dynamics shares are held by institutional investors. 5.2% of Barrick Mining shares are held by insiders. Comparatively, 6.6% of Steel Dynamics 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.

Dividends

Barrick Mining pays an annual dividend of $0.70 per share and has a dividend yield of 1.6%. Steel Dynamics pays an annual dividend of $2.12 per share and has a dividend yield of 0.9%. Barrick Mining pays out 18.0% of its earnings in the form of a dividend. Steel Dynamics pays out 19.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Steel Dynamics has increased its dividend for 13 consecutive years. Barrick Mining is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Barrick Mining and Steel Dynamics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barrick Mining	0	5	17	1	2.83
Steel Dynamics	0	4	8	0	2.67

Barrick Mining currently has a consensus price target of $52.63, suggesting a potential upside of 20.95%. Steel Dynamics has a consensus price target of $258.45, suggesting a potential upside of 7.73%. Given Barrick Mining’s stronger consensus rating and higher possible upside, equities analysts plainly believe Barrick Mining is more favorable than Steel Dynamics.

Earnings and Valuation

This table compares Barrick Mining and Steel Dynamics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barrick Mining	$16.96 billion	4.22	$4.99 billion	$3.88	11.22
Steel Dynamics	$18.18 billion	1.89	$1.19 billion	$11.03	21.75

Barrick Mining has higher earnings, but lower revenue than Steel Dynamics. Barrick Mining is trading at a lower price-to-earnings ratio than Steel Dynamics, indicating that it is currently the more affordable of the two stocks.

Summary

Barrick Mining beats Steel Dynamics on 11 of the 18 factors compared between the two stocks.

About Barrick Mining

Barrick Gold Corporation is a sector-leading gold and copper producer.  Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX.
 
In January 2019 Barrick merged with Randgold Resources and in July that year it combined its gold mines in Nevada, USA, with those of Newmont Corporation in a joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick. Nevada Gold Mines is the world’s largest gold mining complex.  Barrick owns and operates six Tier One gold mines:  Cortez, Carlin and Turquoise Ridge in Nevada, Loulo-Gounkoto in Mali, Kibali in the Democratic Republic of Congo and Pueblo Viejo in the Dominican Republic.
 
It has gold and copper mines and projects in 13 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia. Barrick’s diversified portfolio spans the world’s most prolific gold districts and is focused on high-margin, long life assets.

About Steel Dynamics

Steel Dynamics, Inc., together with its subsidiaries, operates as a steel producer and metal recycler in the United States. The Steel Operations segment offers hot rolled, cold rolled, and coated steel products; parallel flange beams and channel sections, flat bars, large unequal leg angles, and reinforcing steel bars, as well as standard strength carbon, intermediate alloy hardness, and premium grade rail products; engineered special-bar-quality products, merchant-bar-quality products, and other engineered round steel bars; channels, angles, flats, merchant rounds, and reinforcing steel bars; and specialty shapes and light structural steel products. This segment also engages in turning, polishing, straightening, chamfering, precision saw-cutting, and heat treating of bar products. Its products are used in construction, automotive, manufacturing, transportation, heavy and agriculture equipment, and pipe and tube markets. The Metals Recycling Operations segment is involved in the ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage, and scrap management services. Its ferrous products include heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast-iron products; and nonferrous products comprise aluminum, brass, copper, stainless steel, and other nonferrous metals. The Steel Fabrication Operations segment produces steel non-residential building components, such as steel joists, girders, trusses, and steel deck products for non-residential steel fabricators, metal building companies, general construction contractors, developers, owners, brokers, and governmental entities, as well as e-commerce warehouses, data centers, metal buildings, and education and commercial building projects. The Aluminum Operations segment offers recycled aluminum flat rolled products. The company also exports its products. Steel Dynamics, Inc. was founded in 1993 and is headquartered in Fort Wayne, Indiana.