Head-To-Head Analysis: JFE (OTCMKTS:JFEEF) versus Cleveland-Cliffs (NYSE:CLF)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cleveland-Cliffs	-9.00%	-20.02%	-6.10%
JFE	1.63%	2.95%	1.34%

Analyst Recommendations

This is a summary of current ratings for Cleveland-Cliffs and JFE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cleveland-Cliffs	3	4	3	0	2.00
JFE	0	0	0	0	0.00

Cleveland-Cliffs presently has a consensus target price of $12.68, suggesting a potential upside of 14.97%. Given Cleveland-Cliffs’ stronger consensus rating and higher possible upside, equities analysts clearly believe Cleveland-Cliffs is more favorable than JFE.

Volatility & Risk

Cleveland-Cliffs has a beta of 2.07, suggesting that its share price is 107% more volatile than the S&P 500. Comparatively, JFE has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Institutional & Insider Ownership

67.7% of Cleveland-Cliffs shares are held by institutional investors. 1.8% of Cleveland-Cliffs shares are held 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.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cleveland-Cliffs	$18.62 billion	0.29	-$754.00 million	($3.40)	-3.24
JFE	$31.91 billion	0.24	$606.33 million	$0.76	15.84

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

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.

About JFE

JFE Holdings, Inc., through its subsidiaries, engages in steel, engineering, and trading businesses in Japan and internationally. Its Steel segment produces and sells various steel products, processed steel products, and raw materials, as well as operates in the transportation, facility maintenance, and construction businesses. The company's Engineering segment handles the engineering of energy, urban environment, steel structures and industrial machinery, recycling, and electricity retailing projects. Its Trading segment purchases, processes, and distributes steel products, raw materials for steel production, nonferrous metal products, food, etc. JFE Holdings, Inc. was incorporated in 2002 and is headquartered in Tokyo, Japan.