Financial Comparison: Cleveland-Cliffs (NYSE:CLF) and HudBay Minerals (NYSE:HBM)

Cleveland-Cliffs (NYSE:CLF) and HudBay Minerals (NYSE:HBM) are both mid-cap materials companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Risk & Volatility

Cleveland-Cliffs has a beta of 1.99, indicating that its share price is 99% more volatile than the S&P 500. Comparatively, HudBay Minerals has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500.

Institutional and Insider Ownership

67.7% of Cleveland-Cliffs shares are owned by institutional investors. Comparatively, 57.8% of HudBay Minerals shares are owned by institutional investors. 0.9% of Cleveland-Cliffs shares are owned by insiders. Comparatively, 0.3% of HudBay Minerals shares are owned by 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 Cleveland-Cliffs and HudBay Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cleveland-Cliffs	-2.36%	-6.83%	-2.05%
HudBay Minerals	27.48%	9.47%	5.44%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cleveland-Cliffs	$18.61 billion	0.35	-$1.48 billion	($0.85)	-13.25
HudBay Minerals	$2.21 billion	4.13	$568.50 million	$1.70	12.08

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Cleveland-Cliffs and HudBay Minerals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cleveland-Cliffs	2	7	3	0	2.08
HudBay Minerals	0	2	10	0	2.83

Cleveland-Cliffs currently has a consensus target price of $14.18, indicating a potential upside of 25.89%. HudBay Minerals has a consensus target price of $31.33, indicating a potential upside of 52.56%. Given HudBay Minerals’ stronger consensus rating and higher probable upside, analysts plainly believe HudBay Minerals is more favorable than Cleveland-Cliffs.

Summary

HudBay Minerals beats Cleveland-Cliffs on 10 of the 14 factors compared between 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 HudBay Minerals

Hudbay Minerals Inc., a diversified mining company, focuses on the exploration, development, operation, and optimization of properties in North and South America. It produces copper concentrates containing gold, silver, and molybdenum; gold concentrates containing zinc; zinc concentrates; molybdenum concentrates; and silver/gold doré. The company's flagship project is the 100% owned Constancia mine located in the Province of Chumbivilcas in southern Peru. Hudbay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.