Cleveland-Cliffs (NYSE:CLF – Get Free Report) and Iamgold (NYSE:IAG – Get Free Report) are both materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
Profitability
This table compares Cleveland-Cliffs and Iamgold’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cleveland-Cliffs | -4.56% | -13.37% | -3.96% |
| Iamgold | 31.40% | 28.97% | 20.87% |
Insider & Institutional Ownership
67.7% of Cleveland-Cliffs shares are held by institutional investors. Comparatively, 47.1% of Iamgold shares are held by institutional investors. 0.9% of Cleveland-Cliffs shares are held by insiders. Comparatively, 0.2% of Iamgold shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cleveland-Cliffs | 2 | 7 | 2 | 0 | 2.00 |
| Iamgold | 0 | 3 | 5 | 2 | 2.90 |
Cleveland-Cliffs presently has a consensus target price of $12.06, indicating a potential downside of 3.71%. Iamgold has a consensus target price of $21.83, indicating a potential upside of 6.94%. Given Iamgold’s stronger consensus rating and higher probable upside, analysts clearly believe Iamgold is more favorable than Cleveland-Cliffs.
Risk and Volatility
Cleveland-Cliffs has a beta of 2.1, suggesting that its stock price is 110% more volatile than the S&P 500. Comparatively, Iamgold has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.
Earnings & Valuation
This table compares Cleveland-Cliffs and Iamgold”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cleveland-Cliffs | $19.20 billion | 0.37 | -$1.48 billion | ($1.62) | -7.73 |
| Iamgold | $2.85 billion | 4.07 | $664.40 million | $1.98 | 10.31 |
Iamgold has lower revenue, but higher earnings than Cleveland-Cliffs. Cleveland-Cliffs is trading at a lower price-to-earnings ratio than Iamgold, indicating that it is currently the more affordable of the two stocks.
Summary
Iamgold beats Cleveland-Cliffs on 11 of the 15 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 Iamgold
IAMGOLD Corporation, through its subsidiaries, operates as an intermediate gold producer and developer in Canada and Burkina Faso. It owns 100% interest in the Westwood project that covers an area of 1,925 hectare and located in Quebec; a 60% interest in the Côté gold project, which covers an area of 596 square kilometer located in Ontario, Canada; and a 90% interests in the Essakane project that covers an area of 274,000 square kilometer situated in Burkina Faso. IAMGOLD Corporation was incorporated in 1990 and is headquartered in Toronto, Canada.
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