ArcelorMittal (NYSE: MT) and SunCoke Energy Partners (NYSE:SXCP) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitabiliy.

Risk & Volatility

ArcelorMittal has a beta of 2.09, suggesting that its share price is 109% more volatile than the S&P 500. Comparatively, SunCoke Energy Partners has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.

Institutional & Insider Ownership

9.7% of ArcelorMittal shares are held by institutional investors. Comparatively, 28.1% of SunCoke Energy Partners shares are held by institutional investors. 0.1% of ArcelorMittal shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

SunCoke Energy Partners pays an annual dividend of $2.38 per share and has a dividend yield of 13.3%. ArcelorMittal does not pay a dividend. SunCoke Energy Partners pays out -127.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for ArcelorMittal and SunCoke Energy Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArcelorMittal 1 1 12 0 2.79
SunCoke Energy Partners 0 0 1 0 3.00

ArcelorMittal presently has a consensus target price of $31.90, indicating a potential upside of 17.99%. SunCoke Energy Partners has a consensus target price of $19.00, indicating a potential upside of 5.85%. Given ArcelorMittal’s higher probable upside, analysts plainly believe ArcelorMittal is more favorable than SunCoke Energy Partners.

Profitability

This table compares ArcelorMittal and SunCoke Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ArcelorMittal 5.50% 10.52% 4.58%
SunCoke Energy Partners -6.23% -10.65% -2.97%

Earnings and Valuation

This table compares ArcelorMittal and SunCoke Energy Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ArcelorMittal $61.98 billion 0.45 $7.47 billion $3.33 8.12
SunCoke Energy Partners $800.00 million 1.04 $218.50 million ($1.87) -9.60

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

Summary

ArcelorMittal beats SunCoke Energy Partners on 10 of the 16 factors compared between the two stocks.

About ArcelorMittal

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).

About SunCoke Energy Partners

SunCoke Energy Partners, L.P. is engaged in the production of coke used in the blast furnace production of steel. As of December 31, 2016, the Company owned a 98% interest in Haverhill Coke Company LLC (Haverhill), Middletown Coke Company, LLC (Middletown), and Gateway Energy and Coke Company, LLC (Granite City). The Company’s segments include Domestic Coke, which consists of the Haverhill, Middletown and Granite City cokemaking and heat recovery operations located in Franklin Furnace, Ohio; Middletown, Ohio, and Granite City, Illinois, respectively, and Coal Logistics, which consists of the Company’s Convent Marine Terminal, Kanawha River Terminals, LLC and SunCoke Lake Terminal, LLC (Lake Terminal) coal handling and/or mixing service operations in Convent, Louisiana; Ceredo and Belle, West Virginia, and East Chicago, Indiana, respectively. It also provides coal handling and/or mixing services at its Coal Logistics terminals to steel, coke, electric utility and coal mining customers.

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