Cleveland-Cliffs (NYSE:CLF) vs. Ternium (NYSE:TX) Head-To-Head Comparison

Ternium (NYSE:TX) and Cleveland-Cliffs (NYSE:CLF) are both mid-cap basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.

Insider & Institutional Ownership

12.0% of Ternium shares are owned by institutional investors. Comparatively, 67.7% of Cleveland-Cliffs shares are owned by institutional investors. 0.0% of Ternium shares are owned by company insiders. Comparatively, 1.7% of Cleveland-Cliffs shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ternium	3.66%	1.95%	1.35%
Cleveland-Cliffs	-9.03%	-17.97%	-6.03%

Risk & Volatility

Ternium has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, Cleveland-Cliffs has a beta of 1.93, indicating that its share price is 93% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Ternium and Cleveland-Cliffs, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ternium	2	2	2	0	2.00
Cleveland-Cliffs	1	5	3	0	2.22

Ternium presently has a consensus target price of $32.67, indicating a potential downside of 5.90%. Cleveland-Cliffs has a consensus target price of $11.24, indicating a potential downside of 6.84%. Given Ternium’s higher probable upside, analysts plainly believe Ternium is more favorable than Cleveland-Cliffs.

Valuation and Earnings

This table compares Ternium and Cleveland-Cliffs”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ternium	$17.65 billion	0.39	-$53.67 million	$3.03	11.46
Cleveland-Cliffs	$19.19 billion	0.31	-$754.00 million	($3.41)	-3.54

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

Summary

Ternium beats Cleveland-Cliffs on 8 of the 14 factors compared between the two stocks.

About Ternium

Ternium S.A., together with its subsidiaries, manufactures and distributes steel products in Mexico, Southern Region, Brazil, and internationally. It operates through three segments: Steel, Mining, and Usiminas. The Steel segment offers slabs, hot and cold rolled products, coated products, roll formed and tubular products, bars, billets, and other products. Its Mining segment sells iron ore and pellets. The Usiminas segment offers iron ore extraction, steel transformation, and production of capital goods and logistics; and manufactures and sells various products and raw materials, such as flat steel, iron ore, and stamped steel parts for the automotive industry and products for the civil construction and capital goods industry. It also provides medical and social; scrap; renewable energy; and engineering and other services, as well as operates as a distribution company. In addition, the company engages in the exploration, exploitation, and pelletizing of iron ore. Ternium S.A. was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.

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.