Financial Survey: Cleveland-Cliffs (NYSE:CLF) and HudBay Minerals (NYSE:HBM)

HudBay Minerals (NYSE:HBM) and Cleveland-Cliffs (NYSE:CLF) are both mid-cap materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares HudBay Minerals and Cleveland-Cliffs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HudBay Minerals	27.48%	9.47%	5.44%
Cleveland-Cliffs	-2.36%	-6.83%	-2.05%

Analyst Recommendations

This is a breakdown of recent ratings for HudBay Minerals and Cleveland-Cliffs, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HudBay Minerals	0	2	10	0	2.83
Cleveland-Cliffs	2	7	3	0	2.08

HudBay Minerals currently has a consensus target price of $31.33, indicating a potential upside of 44.59%. Cleveland-Cliffs has a consensus target price of $14.18, indicating a potential downside of 0.28%. Given HudBay Minerals’ stronger consensus rating and higher probable upside, equities analysts plainly believe HudBay Minerals is more favorable than Cleveland-Cliffs.

Valuation & Earnings

This table compares HudBay Minerals and Cleveland-Cliffs”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HudBay Minerals	$2.21 billion	4.35	$568.50 million	$1.70	12.75
Cleveland-Cliffs	$18.61 billion	0.44	-$1.48 billion	($0.85)	-16.73

HudBay Minerals has higher earnings, but lower revenue than Cleveland-Cliffs. Cleveland-Cliffs is trading at a lower price-to-earnings ratio than HudBay Minerals, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

57.8% of HudBay Minerals shares are owned by institutional investors. Comparatively, 67.7% of Cleveland-Cliffs shares are owned by institutional investors. 0.3% of HudBay Minerals shares are owned by insiders. Comparatively, 0.9% of Cleveland-Cliffs shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

HudBay Minerals has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500. Comparatively, Cleveland-Cliffs has a beta of 2.09, meaning that its stock price is 109% more volatile than the S&P 500.

Summary

HudBay Minerals beats Cleveland-Cliffs on 10 of the 14 factors compared between the two stocks.

About HudBay Minerals

Hudbay Minerals Inc., a diversified mining company, focuses on the exploration, development, operation, and optimization of properties in North and South America. It produces copper concentrates containing gold, silver, and molybdenum; gold concentrates containing zinc; zinc concentrates; molybdenum concentrates; and silver/gold doré. The company's flagship project is the 100% owned Constancia mine located in the Province of Chumbivilcas in southern Peru. Hudbay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.

About Cleveland-Cliffs

Cleveland-Cliffs is the largest flat-rolled steel company and the largest iron ore pellet producer in North America. The company is vertically integrated from mining through iron making, steelmaking, rolling, finishing and downstream with hot and cold stamping of steel parts and components. The company was formerly known as Cliffs Natural Resources Inc. and changed its name to Cleveland-Cliffs Inc. in August 2017. Cleveland-Cliffs Inc. was founded in 1847 and is headquartered in Cleveland, Ohio.