Vedanta Resources (OTCMKTS: VDNRF) and Cleveland-Cliffs (NYSE:CLF) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.

Valuation and Earnings

This table compares Vedanta Resources and Cleveland-Cliffs’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vedanta Resources $11.52 billion 0.26 -$22.70 million $0.01 1,092.50
Cleveland-Cliffs $2.33 billion 1.06 $367.00 million $0.50 16.52

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

Dividends

Vedanta Resources pays an annual dividend of $0.59 per share and has a dividend yield of 5.4%. Cleveland-Cliffs does not pay a dividend. Vedanta Resources pays out 5,900.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Vedanta Resources has a beta of 2.12, indicating that its stock price is 112% more volatile than the S&P 500. Comparatively, Cleveland-Cliffs has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Vedanta Resources N/A N/A N/A
Cleveland-Cliffs 15.12% -40.15% 9.98%

Institutional & Insider Ownership

65.0% of Cleveland-Cliffs shares are owned by institutional investors. 0.9% of Cleveland-Cliffs shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Vedanta Resources and Cleveland-Cliffs, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vedanta Resources 0 1 0 0 2.00
Cleveland-Cliffs 2 5 8 0 2.40

Cleveland-Cliffs has a consensus price target of $9.85, indicating a potential upside of 19.25%. Given Cleveland-Cliffs’ stronger consensus rating and higher probable upside, analysts clearly believe Cleveland-Cliffs is more favorable than Vedanta Resources.

Summary

Cleveland-Cliffs beats Vedanta Resources on 11 of the 16 factors compared between the two stocks.

Vedanta Resources Company Profile

Vedanta Resources plc operates as a diversified natural resources company in India, Zambia, South Africa, Namibia, the United Arab Emirates, Ireland, Australia, and Liberia. It primarily produces zinc, lead, silver, copper, iron ore, and aluminum deposits. The company also explores for, extracts, and processes minerals, as well as oil and gas. In addition, it operates as a power producer with an installed capacity of 8.4 gigawatts of thermal based power generation and 274 megawatts of wind power generation. Further, the company engages in the port operations business in India; mining, smelting, and refining copper, aluminum, zinc, and iron ore; and gold and silver processing activity. Additionally, it provides accommodation and catering services; and leases medical equipment, as well as offers related building and conducting services. The company was founded in 1976 and is headquartered in London, the United Kingdom. Vedanta Resources plc is a subsidiary of Volcan Investments Limited.

Cleveland-Cliffs Company Profile

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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