Cliffs Natural Resources (CLF) and Northwest Pipe (NWPX) Head to Head Contrast

Cliffs Natural Resources (NYSE: CLF) and Northwest Pipe (NASDAQ:NWPX) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Volatility and Risk

Cliffs Natural Resources has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500. Comparatively, Northwest Pipe has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Insider and Institutional Ownership

56.8% of Cliffs Natural Resources shares are held by institutional investors. Comparatively, 86.3% of Northwest Pipe shares are held by institutional investors. 0.5% of Cliffs Natural Resources shares are held by insiders. Comparatively, 2.0% of Northwest Pipe shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Cliffs Natural Resources and Northwest Pipe’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cliffs Natural Resources $2.11 billion 0.85 $174.10 million $0.52 11.63
Northwest Pipe $156.26 million 1.08 -$9.26 million ($0.18) -97.50

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

Profitability

This table compares Cliffs Natural Resources and Northwest Pipe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cliffs Natural Resources 5.48% -29.06% 13.16%
Northwest Pipe -1.59% -3.03% -2.67%

Analyst Ratings

This is a breakdown of current ratings and target prices for Cliffs Natural Resources and Northwest Pipe, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cliffs Natural Resources 2 4 3 0 2.11
Northwest Pipe 0 1 0 0 2.00

Cliffs Natural Resources currently has a consensus price target of $8.67, suggesting a potential upside of 43.25%. Northwest Pipe has a consensus price target of $9.00, suggesting a potential downside of 48.72%. Given Cliffs Natural Resources’ stronger consensus rating and higher probable upside, research analysts plainly believe Cliffs Natural Resources is more favorable than Northwest Pipe.

Summary

Cliffs Natural Resources beats Northwest Pipe on 9 of the 13 factors compared between the two stocks.

About Cliffs Natural Resources

Cleveland-Cliffs Inc, formerly Cliffs Natural Resources Inc., is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. The Company is a producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel companies in the United States, Canada and Mexico. Its Asia Pacific Iron Ore operations are located in Western Australia and consist of its Koolyanobbing operation. The Koolyanobbing operations serve the Asian iron ore markets with direct-shipped fines and lump ore. In addition, the Company operates an iron ore mining complex in Western Australia. In the United States, the Company owned four operational iron ore mines and one indefinitely idled mine.

About Northwest Pipe

Northwest Pipe Company is a manufacturer of engineered steel pipe water systems. The Company operates through two segments. The Water Transmission segment produces steel pipeline systems for use in drinking water infrastructure, and has approximately eight manufacturing facilities, located in Portland, Oregon; Denver, Colorado; Adelanto, California; Parkersburg, West Virginia; Saginaw, Texas; St. Louis, Missouri; Salt Lake City, Utah, and Monterrey, Mexico. The Tubular Products segment produces steel line pipe products for energy applications, and has a manufacturing facility located in Atchison, Kansas. The Company, through Water Transmission Group, produces engineered welded steel pipe products for use in water transmission applications. It also manufactures smaller diameter electric resistance welded (ERW) steel pipe through its Tubular Products Group. The Company’s solutions-based products are used in water transmission, plant piping, tunnels and river crossings applications.

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