Head to Head Review: ArcelorMittal (MT) vs. Sumitomo (SSUMY)

ArcelorMittal (NYSE: MT) and Sumitomo (OTCMKTS:SSUMY) are both large-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Profitability

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This table compares ArcelorMittal and Sumitomo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ArcelorMittal 6.65% 12.03% 5.46%
Sumitomo 6.76% 11.96% 3.97%

Volatility and Risk

ArcelorMittal has a beta of 2.38, meaning that its share price is 138% more volatile than the S&P 500. Comparatively, Sumitomo has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Earnings & Valuation

This table compares ArcelorMittal and Sumitomo’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ArcelorMittal $68.68 billion 0.49 $4.57 billion $5.34 6.16
Sumitomo $36.01 billion 0.60 $1.54 billion $1.23 14.05

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArcelorMittal 0 2 9 0 2.82
Sumitomo 0 0 0 0 N/A

ArcelorMittal currently has a consensus price target of $36.33, indicating a potential upside of 10.50%. Given ArcelorMittal’s higher possible upside, equities analysts plainly believe ArcelorMittal is more favorable than Sumitomo.

Institutional and Insider Ownership

4.8% of ArcelorMittal shares are held by institutional investors. Comparatively, 0.1% of Sumitomo shares are held by institutional investors. 0.1% of ArcelorMittal shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Sumitomo pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. ArcelorMittal does not pay a dividend. Sumitomo pays out 16.3% of its earnings in the form of a dividend.

Summary

ArcelorMittal beats Sumitomo on 11 of the 15 factors compared between the two stocks.

About ArcelorMittal

ArcelorMittal, together with its subsidiaries, owns and operates steel manufacturing and mining facilities in Europe, North and South America, Asia, and Africa. It operates through NAFTA, Brazil, Europe, ACIS, and Mining segments. The company produces finished and semi-finished steel products with various specifications. Its principal steel products include semi-finished flat products, such as slabs; finished flat products comprising plates, hot- and cold-rolled coils and sheets, hot-dipped and electro-galvanized coils and sheets, and tinplate and color coated coils and sheets; semi-finished long products, such as blooms and billets; finished long products, including bars, wire-rods, structural sections, rails, sheet piles, and wire-products; and seamless and welded pipes and tubes. The company's principal mining products comprise iron ore lump, fines, concentrate, pellets, and sinter feed; and coking, pulverized coal injection, and thermal coal. It provides its steel products to the automotive, appliance, engineering, construction, energy, and machinery industries. The company sells its products in local markets and through a centralized marketing organization to customers in approximately 160 countries. It has iron ore mining activities in Brazil, Bosnia, Canada, Kazakhstan, Liberia, Mexico, Ukraine, and the United States; and coal mining activities in Kazakhstan and the United States. The company was founded in 1976 and is headquartered in Luxembourg.

About Sumitomo

Sumitomo Corporation imports, exports, and trades in various goods and commodities worldwide. The company's Metal Products segment provides steel products, including steel sheets and tubular products, as well as non-ferrous metal products, such as aluminum and titanium. Its Transportation & Construction Systems segment offers products and services related to ship, aerospace equipment, railway and other transportation systems, construction and mining equipment, forest machines, and industrial vehicles. This segment is also involved in the manufacture, distribution, and retail of automobile and automotive parts; and the provision of leasing services. The company's Environment & Infrastructure segment engages in the social infrastructure business, such as electric power, water supply, and sewerage systems; renewable energy business comprising solar photovoltaic, geothermal, and wind power generation; environmental business consisting of batteries and recycling activities; industrial infrastructure business, such as industrial facilities and equipment; and logistics, insurance, and industrial-park-related businesses. Its Media, ICT, Lifestyle Related Goods & Services segment engages in the areas of media, ICT, lifestyle/retail, food/food product, general materials and supplies, construction, and real estate businesses. The company's Mineral Resources, Energy, Chemical & Electronics segment engages in mineral resources, energy, basic chemicals, electronics, and life sciences businesses; trading of carbon products, steel making materials, petroleum, and natural gas, as well as commodity derivatives; and synthetic resin materials, organic/inorganic chemicals, electronic materials, and rare earth elements businesses. This segment is also involved in the pharmaceuticals, agricultural chemicals, fertilizers, pet supplies, and other businesses, as well as the provision of electronic manufacturing services. The company was founded in 1919 and is headquartered in Tokyo, Japan.

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