Comparing JFE (OTCMKTS:JFEEF) & Commercial Metals (NYSE:CMC)

JFE (OTCMKTS:JFEEF) and Commercial Metals (NYSE:CMC) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Volatility and Risk

JFE has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, Commercial Metals has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Insider and Institutional Ownership

86.9% of Commercial Metals shares are owned by institutional investors. 0.6% of Commercial Metals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares JFE and Commercial Metals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JFE	$31.91 billion	0.06	$606.33 million	$0.52	21.44
Commercial Metals	$7.80 billion	0.99	$84.66 million	$4.49	15.50

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

Analyst Ratings

This is a summary of current recommendations and price targets for JFE and Commercial Metals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JFE	0	0	0	0	0.00
Commercial Metals	0	5	7	1	2.69

Commercial Metals has a consensus target price of $71.50, suggesting a potential upside of 2.71%. Given Commercial Metals’ stronger consensus rating and higher possible upside, analysts clearly believe Commercial Metals is more favorable than JFE.

Profitability

This table compares JFE and Commercial Metals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JFE	1.15%	2.03%	0.92%
Commercial Metals	6.02%	13.54%	6.98%

Summary

Commercial Metals beats JFE on 12 of the 15 factors compared between the two stocks.

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.

About Commercial Metals

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally. It operates through two segments, North America and Europe. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. It also manufactures and sells finished long steel products, including reinforcing bar, merchant bar, light structural, and other special sections, as well as semi-finished billets for rerolling and forging applications. In addition, the company provides fabricated rebar used to reinforce concrete primarily in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams; sells and rents construction-related products and equipment to concrete installers and other businesses; and manufactures and sells strength bars for the truck trailer industry, special bar steels for the energy market, and armor plates for military vehicles. Further, it manufactures rebars, merchant bars, and wire rods; and sells fabricated rebars, wire meshes, fabricated meshes, assembled rebar cages, and other fabricated rebar by-products to fabricators, manufacturers, distributors, and construction companies. The company was founded in 1915 and is headquartered in Irving, Texas.