Nucor Corporation (NYSE: NUE) and ArcelorMittal (NYSE:MT) are both large-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Insider & Institutional Ownership

74.8% of Nucor Corporation shares are held by institutional investors. Comparatively, 3.6% of ArcelorMittal shares are held by institutional investors. 0.7% of Nucor Corporation shares are held by company insiders. Comparatively, 0.1% of ArcelorMittal shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Nucor Corporation has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, ArcelorMittal has a beta of 2.19, indicating that its stock price is 119% more volatile than the S&P 500.

Dividends

Nucor Corporation pays an annual dividend of $1.51 per share and has a dividend yield of 2.6%. ArcelorMittal does not pay a dividend. Nucor Corporation pays out 43.9% of its earnings in the form of a dividend. ArcelorMittal has increased its dividend for 43 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings for Nucor Corporation and ArcelorMittal, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nucor Corporation 0 6 9 0 2.60
ArcelorMittal 1 2 10 0 2.69

Nucor Corporation presently has a consensus target price of $67.44, indicating a potential upside of 16.27%. ArcelorMittal has a consensus target price of $31.07, indicating a potential upside of 5.61%. Given Nucor Corporation’s higher probable upside, equities analysts plainly believe Nucor Corporation is more favorable than ArcelorMittal.

Profitability

This table compares Nucor Corporation and ArcelorMittal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nucor Corporation 5.80% 12.77% 6.87%
ArcelorMittal 5.50% 10.52% 4.58%

Valuation and Earnings

This table compares Nucor Corporation and ArcelorMittal’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Nucor Corporation $16.21 billion 1.14 $796.27 million $3.44 16.86
ArcelorMittal $56.79 billion 0.53 $1.78 billion $3.33 8.83

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

Summary

Nucor Corporation beats ArcelorMittal on 10 of the 17 factors compared between the two stocks.

Nucor Corporation Company Profile

Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

ArcelorMittal Company Profile

ArcelorMittal S.A. (ArcelorMittal) is a holding company. The Company, together with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia and Africa. ArcelorMittal operates through five segments, which include NAFTA; Europe; Brazil; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA segment produces flat, long and tubular products. The Brazil segment includes the flat operations of Brazil, and the long and tubular operations of Brazil and neighboring countries. The Europe segment is the flat steel producer in Europe. The ACIS segment produces a combination of flat, long products and tubular products. The Mining segment comprises all mines owned by ArcelorMittal in the Americas, Asia, Europe and Africa. It produces a range of finished and semi-finished steel products (semis).

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