Critical Comparison: Alpha Metallurgical Resources (NYSE:AMR) & Cleveland-Cliffs (NYSE:CLF)

Alpha Metallurgical Resources (NYSE:AMR) and Cleveland-Cliffs (NYSE:CLF) are both mid-cap materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent ratings for Alpha Metallurgical Resources and Cleveland-Cliffs, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alpha Metallurgical Resources	2	5	0	0	1.71
Cleveland-Cliffs	2	7	2	0	2.00

Alpha Metallurgical Resources currently has a consensus target price of $176.00, indicating a potential downside of 19.17%. Cleveland-Cliffs has a consensus target price of $12.06, indicating a potential upside of 2.08%. Given Cleveland-Cliffs’ stronger consensus rating and higher possible upside, analysts clearly believe Cleveland-Cliffs is more favorable than Alpha Metallurgical Resources.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alpha Metallurgical Resources	$2.13 billion	1.30	-$61.69 million	($3.58)	-60.82
Cleveland-Cliffs	$18.61 billion	0.36	-$1.48 billion	($1.62)	-7.29

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

Institutional and Insider Ownership

84.3% of Alpha Metallurgical Resources shares are held by institutional investors. Comparatively, 67.7% of Cleveland-Cliffs shares are held by institutional investors. 18.2% of Alpha Metallurgical Resources shares are held by insiders. Comparatively, 0.9% of Cleveland-Cliffs shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Alpha Metallurgical Resources and Cleveland-Cliffs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alpha Metallurgical Resources	-2.23%	-2.99%	-2.01%
Cleveland-Cliffs	-4.56%	-13.37%	-3.96%

Volatility and Risk

Alpha Metallurgical Resources has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Cleveland-Cliffs has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500.

About Alpha Metallurgical Resources

Alpha Metallurgical Resources, Inc., a mining company, produces, processes, and sells met and thermal coal in Virginia and West Virginia. The company offers metallurgical coal products. It operates twenty-two active mines and nine coal preparation and load-out facilities. The company was formerly known as Contura Energy, Inc. and changed its name to Alpha Metallurgical Resources, Inc. in February 2021. Alpha Metallurgical Resources, Inc. was incorporated in 2016 and is headquartered in Bristol, Tennessee.

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.