Cleveland-Cliffs (NYSE:CLF) & Mountain Province Diamonds (MPVD) Critical Review

Cleveland-Cliffs (NYSE: CLF) and Mountain Province Diamonds (NASDAQ:MPVD) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Insider and Institutional Ownership

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60.7% of Cleveland-Cliffs shares are owned by institutional investors. Comparatively, 23.5% of Mountain Province Diamonds shares are owned by institutional investors. 0.9% of Cleveland-Cliffs shares are owned by company insiders. Comparatively, 4.8% of Mountain Province Diamonds shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Cleveland-Cliffs and Mountain Province Diamonds, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cleveland-Cliffs 2 5 4 0 2.18
Mountain Province Diamonds 0 0 0 0 N/A

Cleveland-Cliffs presently has a consensus price target of $9.67, suggesting a potential upside of 33.15%. Given Cleveland-Cliffs’ higher possible upside, analysts clearly believe Cleveland-Cliffs is more favorable than Mountain Province Diamonds.

Risk & Volatility

Cleveland-Cliffs has a beta of 1.62, indicating that its stock price is 62% more volatile than the S&P 500. Comparatively, Mountain Province Diamonds has a beta of 0.19, indicating that its stock price is 81% less volatile than the S&P 500.

Profitability

This table compares Cleveland-Cliffs and Mountain Province Diamonds’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cleveland-Cliffs 16.09% -35.81% 10.73%
Mountain Province Diamonds N/A 5.33% 2.07%

Valuation and Earnings

This table compares Cleveland-Cliffs and Mountain Province Diamonds’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cleveland-Cliffs $2.33 billion 0.93 $367.00 million $0.50 14.52
Mountain Province Diamonds $131.15 million 2.93 $13.23 million $0.08 30.00

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

Summary

Cleveland-Cliffs beats Mountain Province Diamonds on 9 of the 13 factors compared between the two stocks.

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.

Mountain Province Diamonds Company Profile

Mountain Province Diamonds Inc., through its wholly owned subsidiaries, focuses on the mining and marketing of rough diamonds worldwide. The company's primary asset is its 49% interest in the Gahcho Kué project comprising four mining leases covering an area of approximately 10,353 acres located in the Northwest Territories, Canada. The company was formerly known as Mountain Province Mining Inc. and changed its name to Mountain Province Diamonds Inc. in October 2000. Mountain Province Diamonds Inc. was founded in 1986 and is headquartered in Toronto, Canada.

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