SunCoke Energy (NYSE:SXC) versus Warrior Met Coal (NYSE:HCC) Financial Analysis

SunCoke Energy (NYSE:SXC) and Warrior Met Coal (NYSE:HCC) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Dividends

SunCoke Energy pays an annual dividend of $0.48 per share and has a dividend yield of 6.1%. Warrior Met Coal pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. SunCoke Energy pays out 55.8% of its earnings in the form of a dividend. Warrior Met Coal pays out 41.6% 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. SunCoke Energy has increased its dividend for 4 consecutive years and Warrior Met Coal has increased its dividend for 1 consecutive years. SunCoke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares SunCoke Energy and Warrior Met Coal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SunCoke Energy	3.99%	10.43%	4.44%
Warrior Met Coal	3.30%	2.26%	1.81%

Analyst Ratings

This is a summary of recent recommendations for SunCoke Energy and Warrior Met Coal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SunCoke Energy	0	0	1	0	3.00
Warrior Met Coal	0	3	2	0	2.40

SunCoke Energy presently has a consensus price target of $13.00, suggesting a potential upside of 66.37%. Warrior Met Coal has a consensus price target of $61.00, suggesting a potential upside of 1.14%. Given SunCoke Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe SunCoke Energy is more favorable than Warrior Met Coal.

Valuation & Earnings

This table compares SunCoke Energy and Warrior Met Coal”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SunCoke Energy	$1.94 billion	0.34	$95.90 million	$0.86	9.09
Warrior Met Coal	$1.53 billion	2.08	$250.60 million	$0.77	78.32

Warrior Met Coal has lower revenue, but higher earnings than SunCoke Energy. SunCoke Energy is trading at a lower price-to-earnings ratio than Warrior Met Coal, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

90.5% of SunCoke Energy shares are owned by institutional investors. Comparatively, 92.3% of Warrior Met Coal shares are owned by institutional investors. 1.5% of SunCoke Energy shares are owned by company insiders. Comparatively, 2.1% of Warrior Met Coal shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

SunCoke Energy has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Warrior Met Coal has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Summary

SunCoke Energy beats Warrior Met Coal on 10 of the 17 factors compared between the two stocks.

About SunCoke Energy

SunCoke Energy, Inc. operates as an independent producer of coke in the Americas and Brazil. The company operates through three segments: Domestic Coke, Brazil Coke, and Logistics. It offers metallurgical and thermal coal. The company also provides handling and/or mixing services to steel, coke, electric utility, coal producing, and other manufacturing based customers. In addition, it owns and operates cokemaking facilities in the United States and Brazil. The company was founded in 1960 and is headquartered in Lisle, Illinois.

About Warrior Met Coal

Warrior Met Coal, Inc. produces and exports non-thermal metallurgical coal for the steel industry. It operates two underground mines located in Alabama. The company sells its metallurgical coal to a customer base of blast furnace steel producers located primarily in Europe, South America, and Asia. It also sells natural gas, which is extracted as a byproduct from coal production. Warrior Met Coal, Inc. was incorporated in 2015 and is headquartered in Brookwood, Alabama.