Compania de Minas Buenaventura SAA (BVN) & Freeport-McMoRan (FCX) Critical Survey

Compania de Minas Buenaventura SAA (NYSE:BVN) and Freeport-McMoRan (NYSE:FCX) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Valuation & Earnings

This table compares Compania de Minas Buenaventura SAA and Freeport-McMoRan’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Compania de Minas Buenaventura SAA $1.27 billion 2.59 $60.82 million $0.37 35.11
Freeport-McMoRan $16.40 billion 1.17 $1.82 billion $1.17 11.34

Freeport-McMoRan has higher revenue and earnings than Compania de Minas Buenaventura SAA. Freeport-McMoRan is trading at a lower price-to-earnings ratio than Compania de Minas Buenaventura SAA, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Compania de Minas Buenaventura SAA has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, Freeport-McMoRan has a beta of 2.48, indicating that its stock price is 148% more volatile than the S&P 500.

Dividends

Compania de Minas Buenaventura SAA pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. Freeport-McMoRan pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. Compania de Minas Buenaventura SAA pays out 16.2% of its earnings in the form of a dividend. Freeport-McMoRan pays out 17.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares Compania de Minas Buenaventura SAA and Freeport-McMoRan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Compania de Minas Buenaventura SAA 4.79% 3.29% 2.37%
Freeport-McMoRan 14.87% 24.01% 7.50%

Analyst Ratings

This is a summary of current recommendations and price targets for Compania de Minas Buenaventura SAA and Freeport-McMoRan, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Compania de Minas Buenaventura SAA 0 1 1 0 2.50
Freeport-McMoRan 1 11 6 0 2.28

Compania de Minas Buenaventura SAA currently has a consensus target price of $16.00, indicating a potential upside of 23.17%. Freeport-McMoRan has a consensus target price of $17.91, indicating a potential upside of 34.98%. Given Freeport-McMoRan’s higher probable upside, analysts clearly believe Freeport-McMoRan is more favorable than Compania de Minas Buenaventura SAA.

Institutional & Insider Ownership

51.2% of Compania de Minas Buenaventura SAA shares are owned by institutional investors. Comparatively, 71.7% of Freeport-McMoRan shares are owned by institutional investors. 19.3% of Compania de Minas Buenaventura SAA shares are owned by insiders. Comparatively, 1.1% of Freeport-McMoRan shares are owned by 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.

Summary

Freeport-McMoRan beats Compania de Minas Buenaventura SAA on 11 of the 16 factors compared between the two stocks.

Compania de Minas Buenaventura SAA Company Profile

Compañía de Minas Buenaventura S.A.A., a precious metals company, engages in the exploration, mining, and processing of gold, silver, lead, zinc, and copper metals in Peru, the United States, Europe, and Asia. The company operates five operating mining units, including Uchucchacua, Orcopampa, Julcani, Mallay, and Tambomayo in Peru; and San Gabriel, a mining unit under development stage. It also owns interests in Colquijirca-Marcapunta, Tantahuatay, La Zanja, Yanacocha, Cerro Verde, Yumpag, Daniela, Ccelloccasa, San Gregorio, and Tambomayo mines, as well as Trapiche, a mining unit at the development stage. In addition, the company produces manganese sulphate, which is used in agriculture and mining industries. Further, it provides geological, engineering, design, and construction consulting services to the mining sector; electrical transmission services; and energy generation services through hydroelectric power plants, as well as processes chemicals. The company was founded in 1953 and is based in Lima, Peru.

Freeport-McMoRan Company Profile

Freeport-McMoRan Inc. engages in the mining of mineral properties in the United States, Indonesia, Peru, and Chile. The company primarily explores for copper, gold, molybdenum, silver, and other metals, as well as oil and gas. Its assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Tyrone and Chino in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde and El Abra mines in South America. It also operates a portfolio of oil and gas assets comprising oil and natural gas production onshore in South Louisiana; and on the Gulf of Mexico shelf and oil production offshore California. As of December 31, 2017, the company's estimated consolidated recoverable proven and probable mineral reserves totaled 86.7 billion pounds of copper, 23.5 million ounces of gold, and 2.84 billion pounds of molybdenum, as well as estimated proved developed oil and natural gas reserves totaled 10.1 million barrels of oil equivalents. The company was formerly known as Freeport-McMoRan Copper & Gold Inc. and changed its name to Freeport-McMoRan Inc. in July 2014. Freeport-McMoRan Inc. was founded in 1987 and is headquartered in Phoenix, Arizona.

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