Critical Comparison: FORTESCUE METAL/S (FSUGY) vs. Southern Copper (SCCO)

FORTESCUE METAL/S (OTCMKTS: FSUGY) and Southern Copper (NYSE:SCCO) are both large-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, earnings, risk, dividends, institutional ownership, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for FORTESCUE METAL/S and Southern Copper, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FORTESCUE METAL/S 0 0 0 0 N/A
Southern Copper 5 4 2 0 1.73

Southern Copper has a consensus target price of $45.64, indicating a potential downside of 2.64%. Given Southern Copper’s higher probable upside, analysts clearly believe Southern Copper is more favorable than FORTESCUE METAL/S.

Dividends

FORTESCUE METAL/S pays an annual dividend of $0.52 per share and has a dividend yield of 8.3%. Southern Copper pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%.

Earnings and Valuation

This table compares FORTESCUE METAL/S and Southern Copper’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FORTESCUE METAL/S $8.45 billion 1.16 $2.09 billion N/A N/A
Southern Copper $6.65 billion 5.45 $728.50 million N/A N/A

FORTESCUE METAL/S has higher revenue and earnings than Southern Copper.

Institutional & Insider Ownership

0.1% of FORTESCUE METAL/S shares are held by institutional investors. Comparatively, 7.6% of Southern Copper shares are held by institutional investors. 0.5% of Southern Copper shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares FORTESCUE METAL/S and Southern Copper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FORTESCUE METAL/S N/A N/A N/A
Southern Copper 13.78% 15.50% 7.14%

Volatility and Risk

FORTESCUE METAL/S has a beta of 1.89, meaning that its stock price is 89% more volatile than the S&P 500. Comparatively, Southern Copper has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.

Summary

Southern Copper beats FORTESCUE METAL/S on 8 of the 12 factors compared between the two stocks.

About FORTESCUE METAL/S

Fortescue Metals Group Limited engages in the exploration, development, production, processing, and sale of iron ore in Australia, China, and internationally. It owns and operates the Chichester Hub that consists of the Cloudbreak and Christmas Creek mines located in the Chichester Ranges; and the Solomon Hub comprising the Firetail and Kings Valley mines located in the Hamersley Ranges of Pilbara, Western Australia. The company was founded in 2003 and is based in East Perth, Australia.

About Southern Copper

Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Chile, and Ecuador. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant. The company also operates Buenavista, an open-pit copper mine, as well as two copper concentrators and three SX-EW plants in Mexico. In addition, it operates five underground mines that produce zinc, lead, copper, silver, and gold; a coal mine that produces coal and coke; and a zinc refinery. It has interests in 44,182 hectares of exploration concessions in Peru; 148,122 hectares of exploration concessions in Mexico; 64,899 hectares of exploration concessions in Argentina; 36,387 hectares of exploration concessions in Chile; and 7,298 hectares of exploration concessions in Ecuador. The company was founded in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation is a subsidiary of Americas Mining Corporation.

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