Franco Nevada (FNV) vs. Pan American Silver (NASDAQ:PAAS) Financial Analysis

Franco Nevada (NYSE:FNV) and Pan American Silver (NASDAQ:PAAS) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Valuation and Earnings

This table compares Franco Nevada and Pan American Silver’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Franco Nevada $675.00 million 17.42 $194.70 million $1.08 58.48
Pan American Silver $816.83 million 2.73 $120.99 million $0.51 28.53

Franco Nevada has higher earnings, but lower revenue than Pan American Silver. Pan American Silver is trading at a lower price-to-earnings ratio than Franco Nevada, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Franco Nevada has a beta of -0.18, suggesting that its share price is 118% less volatile than the S&P 500. Comparatively, Pan American Silver has a beta of 0.19, suggesting that its share price is 81% less volatile than the S&P 500.

Dividends

Franco Nevada pays an annual dividend of $0.96 per share and has a dividend yield of 1.5%. Pan American Silver pays an annual dividend of $0.14 per share and has a dividend yield of 1.0%. Franco Nevada pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pan American Silver pays out 27.5% of its earnings in the form of a dividend. Franco Nevada has increased its dividend for 5 consecutive years. Franco Nevada is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Franco Nevada and Pan American Silver, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franco Nevada 0 6 4 0 2.40
Pan American Silver 0 2 9 0 2.82

Franco Nevada currently has a consensus price target of $92.14, indicating a potential upside of 45.89%. Pan American Silver has a consensus price target of $20.88, indicating a potential upside of 43.47%. Given Franco Nevada’s higher probable upside, research analysts clearly believe Franco Nevada is more favorable than Pan American Silver.

Profitability

This table compares Franco Nevada and Pan American Silver’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franco Nevada 32.94% 4.80% 4.72%
Pan American Silver 17.95% 7.06% 5.48%

Insider and Institutional Ownership

63.5% of Franco Nevada shares are held by institutional investors. Comparatively, 49.3% of Pan American Silver shares are held by institutional investors. 12.9% of Pan American Silver shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Franco Nevada beats Pan American Silver on 9 of the 17 factors compared between the two stocks.

Franco Nevada Company Profile

Franco-Nevada Corporation operates as a gold-focused royalty and stream company in the United States, Canada, Mexico, Peru, Chile, Australia, and Africa. The company also holds interests in silver, platinum group metals, oil and gas, and other resource assets. As of December 31, 2017, it had a portfolio of 341 assets. The company was incorporated in 2007 and is headquartered in Toronto, Canada.

Pan American Silver Company Profile

Pan American Silver Corp., together with its subsidiaries, engages in exploration, extraction, processing, refining, and reclamation of silver mines. The company owns and operates silver mines located in Peru, Mexico, Argentina, and Bolivia. It also produces and sells gold, zinc, lead, and copper. The company holds interests in the La Colorada, Dolores, Alamo Dorado, Huaron, Morococha, Manantial Espejo, and San Vicente mines. Pan American Silver Corp. was founded in 1979 and is headquartered in Vancouver, Canada.

Receive News & Ratings for Franco Nevada Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Franco Nevada and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply