Financial Analysis: SSAB (OTCMKTS:SSAAY) versus Warrior Met Coal (NYSE:HCC)

SSAB (OTCMKTS:SSAAY) and Warrior Met Coal (NYSE:HCC) are both mid-cap materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Valuation & Earnings

This table compares SSAB and Warrior Met Coal”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SSAB	$9.84 billion	1.00	$500.98 million	$0.30	16.50
Warrior Met Coal	$1.68 billion	2.67	$57.00 million	$4.16	20.42

SSAB has higher revenue and earnings than Warrior Met Coal. SSAB is trading at a lower price-to-earnings ratio than Warrior Met Coal, indicating that it is currently the more affordable of the two stocks.

Dividends

SSAB pays an annual dividend of $0.05 per share and has a dividend yield of 1.0%. Warrior Met Coal pays an annual dividend of $0.32 per share and has a dividend yield of 0.4%. SSAB pays out 16.7% of its earnings in the form of a dividend. Warrior Met Coal pays out 7.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Warrior Met Coal has raised its dividend for 1 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for SSAB and Warrior Met Coal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SSAB	0	1	2	1	3.00
Warrior Met Coal	0	4	4	0	2.50

Warrior Met Coal has a consensus price target of $104.33, indicating a potential upside of 22.82%. Given Warrior Met Coal’s higher probable upside, analysts plainly believe Warrior Met Coal is more favorable than SSAB.

Risk & Volatility

SSAB has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, Warrior Met Coal has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Institutional & Insider Ownership

92.3% of Warrior Met Coal shares are held by institutional investors. 2.1% of Warrior Met Coal shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares SSAB and Warrior Met Coal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SSAB	5.65%	8.19%	5.24%
Warrior Met Coal	13.05%	10.02%	7.84%

Summary

Warrior Met Coal beats SSAB on 12 of the 18 factors compared between the two stocks.

About SSAB

SSAB AB (publ) produces and sells steel products in Sweden, Finland, Rest of Europe, the United States, and internationally. It operates through five segments: SSAB Special Steels, SSAB Europe, SSAB Americas, Tibnor, and Ruukki Construction. The SSAB Special Steels segment offers quenched and tempered steels, and advanced high-strength steel products for steel and plate production. The SSAB Europe segment provides strip, heavy plate, and tubular products. The SSAB Americas segment sells heavy plates for steel and plate production. The Tibnor segment distributes a range of steel and non-ferrous metals in the Nordics and Baltics. The Ruukki Construction segment produces and sells energy-efficient building and construction solutions. It markets its steel products under the Strenx, Hardox, Docol, GreenCoat, Toolox, Armox, Duroxite, SSAB AM, SSAB Boron, SSAB Domex, SSAB Form, SSAB Laser, SSAB Weathering, Cor-Ten, and SSAB Multisteel brands. The company's products are used by customers in the heavy transport, construction and infrastructure, industrial applications, construction machinery, energy, and material handling markets. SSAB AB (publ) was founded in 1878 and is headquartered in Stockholm, Sweden.

About Warrior Met Coal

Warrior Met Coal, Inc. produces and exports non-thermal metallurgical coal for the steel industry. It operates two underground mines located in Alabama. The company sells its metallurgical coal to a customer base of blast furnace steel producers located primarily in Europe, South America, and Asia. It also sells natural gas, which is extracted as a byproduct from coal production. Warrior Met Coal, Inc. was incorporated in 2015 and is headquartered in Brookwood, Alabama.