Aperam (OTCMKTS:APEMY – Get Free Report) and Cleveland-Cliffs (NYSE:CLF – Get Free Report) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.
Volatility and Risk
Aperam has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Cleveland-Cliffs has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500.
Earnings and Valuation
This table compares Aperam and Cleveland-Cliffs”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Aperam | $6.77 billion | 0.34 | $249.96 million | $3.49 | 9.11 |
| Cleveland-Cliffs | $19.19 billion | 0.24 | -$754.00 million | ($2.44) | -3.75 |
Aperam has higher earnings, but lower revenue than Cleveland-Cliffs. Cleveland-Cliffs is trading at a lower price-to-earnings ratio than Aperam, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
67.7% of Cleveland-Cliffs shares are held by institutional investors. 0.2% of Aperam shares are held by company insiders. Comparatively, 1.7% of Cleveland-Cliffs shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and target prices for Aperam and Cleveland-Cliffs, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Aperam | 0 | 2 | 0 | 0 | 2.00 |
| Cleveland-Cliffs | 1 | 3 | 2 | 1 | 2.43 |
Cleveland-Cliffs has a consensus target price of $9.78, indicating a potential upside of 6.97%. Given Cleveland-Cliffs’ stronger consensus rating and higher probable upside, analysts clearly believe Cleveland-Cliffs is more favorable than Aperam.
Profitability
This table compares Aperam and Cleveland-Cliffs’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Aperam | 3.79% | 2.93% | 1.63% |
| Cleveland-Cliffs | -6.35% | -12.84% | -4.74% |
Summary
Cleveland-Cliffs beats Aperam on 8 of the 15 factors compared between the two stocks.
About Aperam
Aperam S.A., together with its subsidiaries, produces and sells stainless and specialty steel products worldwide. It operates through four segments: Stainless & Electrical Steel; Services & Solutions; Alloys & Specialties; and Recycling & Renewables. The company offers a range of stainless steel products, including grain oriented and non-grain oriented electrical steel products, and specialty alloys. It is also involved in the management of direct sales of stainless steel products from production facilities; distribution of its products; and the provision of transformation services that include value added and customized steel solutions. In addition, the company designs, produces, and transforms various specialty alloys and other specific stainless steels in forms, such as bars, semis, cold-rolled strips, wire and wire rods, and plates in a range on grades. Further, it engages in the trading, processing, and recycling of raw materials, such as superalloys and titanium; provides Recyco, an electric arc furnace recycling facility that retrieves dust and sludge to recycle stainless steel raw materials and reduce waste; and produces wood and charcoal from cultivated eucalyptus forests. The company serves customers in aerospace, automotive, catering, construction, household appliances, electrical engineering, industrial processes, medical, and oil and gas industries. It distributes its products through a network of steel service centers, transformation facilities, and sales offices. The company was incorporated in 2010 and is headquartered in Luxembourg, Luxembourg.
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.
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