Hudbay Minerals (NYSE: HBM) and Cleveland-Cliffs (NYSE:CLF) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.

Dividends

Hudbay Minerals pays an annual dividend of $0.02 per share and has a dividend yield of 0.4%. Cleveland-Cliffs does not pay a dividend. Hudbay Minerals pays out 3.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings for Hudbay Minerals and Cleveland-Cliffs, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hudbay Minerals 0 3 6 0 2.67
Cleveland-Cliffs 2 5 8 0 2.40

Hudbay Minerals presently has a consensus target price of $11.38, indicating a potential upside of 110.65%. Cleveland-Cliffs has a consensus target price of $9.85, indicating a potential upside of 15.88%. Given Hudbay Minerals’ stronger consensus rating and higher possible upside, analysts clearly believe Hudbay Minerals is more favorable than Cleveland-Cliffs.

Volatility & Risk

Hudbay Minerals has a beta of 2.96, indicating that its share price is 196% more volatile than the S&P 500. Comparatively, Cleveland-Cliffs has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.

Earnings and Valuation

This table compares Hudbay Minerals and Cleveland-Cliffs’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hudbay Minerals $1.36 billion 1.04 $163.89 million $0.57 9.47
Cleveland-Cliffs $2.33 billion 1.09 $367.00 million $0.50 17.00

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

Profitability

This table compares Hudbay Minerals and Cleveland-Cliffs’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hudbay Minerals 13.88% 9.04% 4.02%
Cleveland-Cliffs 15.12% -40.15% 9.98%

Institutional and Insider Ownership

63.7% of Hudbay Minerals shares are owned by institutional investors. Comparatively, 65.0% of Cleveland-Cliffs shares are owned by institutional investors. 0.9% of Cleveland-Cliffs shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Cleveland-Cliffs beats Hudbay Minerals on 10 of the 16 factors compared between the two stocks.

About Hudbay Minerals

Hudbay Minerals Inc., an integrated mining company, together with its subsidiaries, focuses on the discovery, production, and marketing of base and precious metals in North and South America. It produces copper concentrates containing copper, gold, and silver; and zinc metal. The company owns four polymetallic mines, four ore concentrators, and a zinc production facility in northern Manitoba and Saskatchewan, Canada, as well as in Cusco, Peru; and a copper project in Arizona, the United States. HudBay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.

About Cleveland-Cliffs

Cleveland-Cliffs Inc. operates as an iron ore mining company in the United States. The company operates four iron ore mines in Michigan and Minnesota; and Koolyanobbing iron ore mining complex located in Western Australia. It sells its products to integrated steel companies and steel producers in the United States and the Asia Pacific. 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.

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