Despite its impressive fundamentals, NYSE:CLF remains undervalued.

Last update: Feb 2, 2024

CLEVELAND-CLIFFS INC (NYSE:CLF) was identified as a decent value stock by our stock screener. NYSE:CLF scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Valuation Assessment of NYSE:CLF

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:CLF has received a 7 out of 10:

Based on the Price/Earnings ratio, CLF is valued a bit cheaper than 68.39% of the companies in the same industry.
CLF is valuated rather cheaply when we compare the Price/Earnings ratio to 26.18, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 10.25, which indicates a very decent valuation of CLF.
Based on the Price/Forward Earnings ratio, CLF is valued cheaply inside the industry as 82.58% of the companies are valued more expensively.
CLF is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.43, which is the current average of the S&P500 Index.
CLF's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CLF is cheaper than 70.97% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CLF is valued cheaply inside the industry as 94.19% of the companies are valued more expensively.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
CLF's earnings are expected to grow with 39.59% in the coming years. This may justify a more expensive valuation.

Exploring NYSE:CLF's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:CLF, the assigned 5 is a significant indicator of profitability:

With a decent Return On Assets value of 2.27%, CLF is doing good in the industry, outperforming 61.94% of the companies in the same industry.
CLF has a Return On Equity of 4.90%. This is in the better half of the industry: CLF outperforms 65.81% of its industry peers.
CLF has a Return On Invested Capital of 4.37%. This is in the better half of the industry: CLF outperforms 63.23% of its industry peers.
CLF had an Average Return On Invested Capital over the past 3 years of 11.31%. This is above the industry average of 8.79%.
The last Return On Invested Capital (4.37%) for CLF is well below the 3 year average (11.31%), which needs to be investigated, but indicates that CLF had better years and this may not be a problem.

Looking at the Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:CLF, the assigned 5 reflects its health status:

CLF has a debt to FCF ratio of 1.94. This is a very positive value and a sign of high solvency as it would only need 1.94 years to pay back of all of its debts.
CLF has a Debt to FCF ratio of 1.94. This is amongst the best in the industry. CLF outperforms 82.58% of its industry peers.
A Debt/Equity ratio of 0.39 indicates that CLF is not too dependend on debt financing.
Even though the debt/equity ratio score it not favorable for CLF, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

What does the Growth looks like for NYSE:CLF

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:CLF has achieved a 5 out of 10:

The Revenue has been growing by 56.65% on average over the past years. This is a very strong growth!
Based on estimates for the next years, CLF will show a very strong growth in Earnings Per Share. The EPS will grow by 39.59% on average per year.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of CLF

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.