Financial Contrast: Southern Copper (NYSE:SCCO) vs. Hudbay Minerals (HBM)

Hudbay Minerals (NYSE:HBM) and Southern Copper (NYSE:SCCO) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Hudbay Minerals and Southern Copper, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hudbay Minerals 0 3 4 0 2.57
Southern Copper 4 4 2 0 1.80

Hudbay Minerals currently has a consensus target price of $6.00, suggesting a potential upside of 30.72%. Southern Copper has a consensus target price of $45.21, suggesting a potential upside of 6.97%. Given Hudbay Minerals’ stronger consensus rating and higher probable upside, research analysts plainly believe Hudbay Minerals is more favorable than Southern Copper.

Insider & Institutional Ownership

58.1% of Hudbay Minerals shares are owned by institutional investors. Comparatively, 7.5% of Southern Copper shares are owned by institutional investors. 0.5% of Southern Copper shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Hudbay Minerals pays an annual dividend of $0.02 per share and has a dividend yield of 0.4%. Southern Copper pays an annual dividend of $1.60 per share and has a dividend yield of 3.8%. Hudbay Minerals pays out 3.5% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Hudbay Minerals and Southern Copper’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hudbay Minerals $1.36 billion 0.88 $163.89 million $0.57 8.05
Southern Copper $6.65 billion 4.91 $728.50 million N/A N/A

Southern Copper has higher revenue and earnings than Hudbay Minerals.

Profitability

This table compares Hudbay Minerals and Southern Copper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hudbay Minerals 13.40% 8.66% 3.96%
Southern Copper 13.78% 15.48% 7.13%

Volatility and Risk

Hudbay Minerals has a beta of 2.87, indicating that its stock price is 187% more volatile than the S&P 500. Comparatively, Southern Copper has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Summary

Southern Copper beats Hudbay Minerals on 9 of the 14 factors compared between the two stocks.

Hudbay Minerals Company Profile

Hudbay Minerals Inc., an integrated mining company, together with its subsidiaries, focuses on the discovery, production, and marketing of base and precious metals in North and South America. It produces copper concentrates containing copper, gold, and silver; and zinc metal. The company owns four polymetallic mines, four ore concentrators, and a zinc production facility in northern Manitoba and Saskatchewan, Canada, as well as in Cusco, Peru; and a copper project in Arizona, the United States. HudBay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.

Southern Copper Company Profile

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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