Critical Contrast: Ramaco Resources (NASDAQ:METC) and Algoma Steel Group (NASDAQ:ASTL)

Ramaco Resources (NASDAQ:METC) and Algoma Steel Group (NASDAQ:ASTL) are both small-cap materials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Institutional and Insider Ownership

74.5% of Ramaco Resources shares are held by institutional investors. Comparatively, 72.0% of Algoma Steel Group shares are held by institutional investors. 46.1% of Ramaco Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Ramaco Resources has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, Algoma Steel Group has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500.

Profitability

This table compares Ramaco Resources and Algoma Steel Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ramaco Resources	-11.98%	-13.54%	-6.01%
Algoma Steel Group	-71.60%	-110.49%	-25.74%

Earnings and Valuation

This table compares Ramaco Resources and Algoma Steel Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ramaco Resources	$536.62 million	1.32	-$51.45 million	($1.07)	-10.46
Algoma Steel Group	$1.49 billion	0.30	-$704.89 million	($7.35)	-0.58

Ramaco Resources has higher earnings, but lower revenue than Algoma Steel Group. Ramaco Resources is trading at a lower price-to-earnings ratio than Algoma Steel Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Ramaco Resources and Algoma Steel Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ramaco Resources	2	3	3	1	2.33
Algoma Steel Group	1	3	0	0	1.75

Ramaco Resources currently has a consensus target price of $22.43, suggesting a potential upside of 100.43%. Given Ramaco Resources’ stronger consensus rating and higher probable upside, equities analysts plainly believe Ramaco Resources is more favorable than Algoma Steel Group.

Summary

Ramaco Resources beats Algoma Steel Group on 12 of the 15 factors compared between the two stocks.

About Ramaco Resources

Ramaco Resources, Inc. engages in the development, operation, and sale of metallurgical coal. Its development portfolio includes the Elk Creek project that covers an area of approximately 20,200 acres located in southern West Virginia; the Berwind property covering an area of approximately 62,500 acres situated on the border of West Virginia and Virginia; the Knox Creek property, which covers an area of approximately 64,050 acres is located in Virginia; the Maben property covering an area of approximately 28,000 acres situated in southwestern Pennsylvania southern West Virginia; and the Brook Mine property that covers an area of approximately 16,000 acres located in northeastern Wyoming. The company serves blast furnace steel mills and coke plants in the United States, as well as metallurgical coal consumers internationally. Ramaco Resources, Inc. was founded in 2015 and is headquartered in Lexington, Kentucky.

About Algoma Steel Group

Algoma Steel Group Inc. produces and sells steel products primarily in North America. The company provides flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural product manufacturers, and the light manufacturing and transportation industries; and plate steel products that consist of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, and military applications. Algoma Steel Group Inc. was founded in 1901 and is headquartered in Sault Ste. Marie, Canada.