Contrasting SSAB (OTCMKTS:SSAAY) and ArcelorMittal (NYSE:MT)

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

Institutional and Insider Ownership

9.3% of ArcelorMittal shares are owned by institutional investors. 0.1% of ArcelorMittal shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

ArcelorMittal has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, SSAB has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.

Dividends

ArcelorMittal pays an annual dividend of $0.47 per share and has a dividend yield of 1.5%. SSAB pays an annual dividend of $0.09 per share and has a dividend yield of 2.9%. ArcelorMittal pays out 30.7% of its earnings in the form of a dividend. SSAB pays out 39.1% 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for ArcelorMittal and SSAB, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ArcelorMittal	0	3	4	0	2.57
SSAB	0	2	0	0	2.00

ArcelorMittal presently has a consensus price target of $32.95, suggesting a potential upside of 5.39%. Given ArcelorMittal’s stronger consensus rating and higher probable upside, equities analysts plainly believe ArcelorMittal is more favorable than SSAB.

Earnings and Valuation

This table compares ArcelorMittal and SSAB”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ArcelorMittal	$62.44 billion	0.41	$1.34 billion	$1.53	20.43
SSAB	$9.78 billion	0.63	$617.08 million	$0.23	13.35

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

Profitability

This table compares ArcelorMittal and SSAB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ArcelorMittal	1.98%	4.11%	2.41%
SSAB	4.99%	7.30%	4.68%

Summary

ArcelorMittal beats SSAB on 11 of the 16 factors compared between the two stocks.

About ArcelorMittal

ArcelorMittal S.A., together with its subsidiaries, operates as integrated steel and mining companies in the United States, Europe, and internationally. It offers semi-finished flat products, including slabs; finished flat products comprising plates, hot- and cold-rolled coils and sheets, hot-dipped and electro-galvanized coils and sheets, tinplate, and color coated coils and sheets; semi-finished long products, such as blooms and billets; finished long products consisting of bars, wire-rods, structural sections, rails, sheet piles, and wire-products; and seamless and welded pipes and tubes. The company also provides mining products, such as iron ore lumps, fines, concentrates, pellets, and sinter feeds; and coking coal. It sells its products to various customers in the automotive, appliance, engineering, construction, energy, and machinery industries through a centralized marketing organization, as well as distributors. The company has iron ore mining activities in Brazil, Bosnia, Canada, Liberia, Mexico, South Africa, and Ukraine. ArcelorMittal S.A. was founded in 1976 and is headquartered in Luxembourg City, Luxembourg.

About SSAB

SSAB AB (publ) produces and sells steel products in Sweden, Finland, Rest of Europe, the United States, and internationally. It operates through five segments: SSAB Special Steels, SSAB Europe, SSAB Americas, Tibnor, and Ruukki Construction. The SSAB Special Steels segment offers quenched and tempered steels, and advanced high-strength steel products for steel and plate production. The SSAB Europe segment provides strip, heavy plate, and tubular products. The SSAB Americas segment sells heavy plates for steel and plate production. The Tibnor segment distributes a range of steel and non-ferrous metals in the Nordics and Baltics. The Ruukki Construction segment produces and sells energy-efficient building and construction solutions. It markets its steel products under the Strenx, Hardox, Docol, GreenCoat, Toolox, Armox, Duroxite, SSAB AM, SSAB Boron, SSAB Domex, SSAB Form, SSAB Laser, SSAB Weathering, Cor-Ten, and SSAB Multisteel brands. The company's products are used by customers in the heavy transport, construction and infrastructure, industrial applications, construction machinery, energy, and material handling markets. SSAB AB (publ) was founded in 1878 and is headquartered in Stockholm, Sweden.