Cleveland-Cliffs (NYSE:CLF) and Lithium Americas (Argentina) (NYSE:LAAC) Head to Head Contrast

Cleveland-Cliffs (NYSE:CLF) and Lithium Americas (Argentina) (NYSE:LAAC) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

67.7% of Cleveland-Cliffs shares are owned by institutional investors. Comparatively, 49.2% of Lithium Americas (Argentina) shares are owned by institutional investors. 1.8% of Cleveland-Cliffs shares are owned by insiders. Comparatively, 19.8% of Lithium Americas (Argentina) shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Cleveland-Cliffs and Lithium Americas (Argentina)’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cleveland-Cliffs	$22.00 billion	0.33	$399.00 million	$0.74	20.78
Lithium Americas (Argentina)	N/A	N/A	$1.29 billion	$7.99	0.40

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

Volatility and Risk

Cleveland-Cliffs has a beta of 2.03, suggesting that its stock price is 103% more volatile than the S&P 500. Comparatively, Lithium Americas (Argentina) has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Cleveland-Cliffs and Lithium Americas (Argentina), as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cleveland-Cliffs	2	6	2	0	2.00
Lithium Americas (Argentina)	0	4	3	0	2.43

Cleveland-Cliffs presently has a consensus price target of $19.44, indicating a potential upside of 26.38%. Lithium Americas (Argentina) has a consensus price target of $8.83, indicating a potential upside of 176.04%. Given Lithium Americas (Argentina)’s stronger consensus rating and higher possible upside, analysts clearly believe Lithium Americas (Argentina) is more favorable than Cleveland-Cliffs.

Profitability

This table compares Cleveland-Cliffs and Lithium Americas (Argentina)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cleveland-Cliffs	1.78%	8.69%	3.89%
Lithium Americas (Argentina)	N/A	3.09%	2.51%

Summary

Cleveland-Cliffs beats Lithium Americas (Argentina) on 7 of the 13 factors compared between the two stocks.

About Cleveland-Cliffs

Cleveland-Cliffs is the largest flat-rolled steel company and the largest iron ore pellet producer in North America. The company is vertically integrated from mining through iron making, steelmaking, rolling, finishing and downstream with hot and cold stamping of steel parts and components. 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.

About Lithium Americas (Argentina)

Lithium Americas (Argentina) Corp. operates as a resource company. The company explores for lithium deposits. The company owns interests in the Cauchari-Olaroz project located in Jujuy province of Argentina. It also has a pipeline of development and exploration stage projects, including the Pastos Grandes project and the Sal de la Puna project located in Salta Province in northwestern Argentina. Lithium Americas (Argentina) Corp. is headquartered in Vancouver, Canada.