First Majestic Silver Corp. (NYSE: AG) and Pan American Silver Corp. (NASDAQ:PAAS) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitabiliy, earnings, institutional ownership and valuation.

Volatility & Risk

First Majestic Silver Corp. has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Pan American Silver Corp. has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500.

Profitability

This table compares First Majestic Silver Corp. and Pan American Silver Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Majestic Silver Corp. 6.67% 3.20% 2.32%
Pan American Silver Corp. 14.56% 6.13% 4.58%

Institutional and Insider Ownership

26.4% of First Majestic Silver Corp. shares are owned by institutional investors. Comparatively, 50.1% of Pan American Silver Corp. shares are owned by institutional investors. 0.9% of First Majestic Silver Corp. shares are owned by company insiders. Comparatively, 12.9% of Pan American Silver Corp. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for First Majestic Silver Corp. and Pan American Silver Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Majestic Silver Corp. 0 6 2 0 2.25
Pan American Silver Corp. 0 5 4 0 2.44

First Majestic Silver Corp. currently has a consensus target price of $15.25, suggesting a potential upside of 144.39%. Pan American Silver Corp. has a consensus target price of $20.00, suggesting a potential upside of 25.00%. Given First Majestic Silver Corp.’s higher probable upside, analysts clearly believe First Majestic Silver Corp. is more favorable than Pan American Silver Corp..

Earnings and Valuation

This table compares First Majestic Silver Corp. and Pan American Silver Corp.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Majestic Silver Corp. $280.67 million 3.67 $105.85 million $0.12 52.00
Pan American Silver Corp. $815.19 million 3.01 $294.08 million $0.77 20.78

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

Dividends

Pan American Silver Corp. pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. First Majestic Silver Corp. does not pay a dividend. Pan American Silver Corp. pays out 13.0% of its earnings in the form of a dividend.

Summary

Pan American Silver Corp. beats First Majestic Silver Corp. on 11 of the 16 factors compared between the two stocks.

About First Majestic Silver Corp.

First Majestic Silver Corp. is a mining company. The Company is focused on silver production in Mexico and it is pursuing the development of its existing mineral property assets. The Company operates through eight segments, six of which are located in Mexico; one retail market segment in Canada, and one metal trading segment in Europe. Its segments in Mexico are Santa Elena, La Encantada, La Parrilla, Del Toro, San Martin and La Guitarra. Its segment in Canada is Coins and Bullion Sales, and the segment in Europe is Silver Sales. The Company owns and operates approximately six producing silver mines: the La Encantada Silver Mine, La Parrilla Silver Mine, Del Toro Silver Mine, San Martin Silver Mine, La Guitarra Silver Mine and Santa Elena Silver Mine. The Company’s subsidiaries include First Majestic Plata, S.A. de C.V., Minera El Pilon, S.A. de C.V., Minera La Encantada, S.A. de C.V., Majestic Services, S.A. de C.V., Santa Elena Oro y Plata, S.A. de C.V. and FMS Trading AG.

About Pan American Silver Corp.

Pan American Silver Corp. is a silver production company. The Company is principally engaged in the operation and development of, and exploration for, silver producing properties. The Company’s segments include Peru, Mexico, Argentina and Bolivia. The Company also produces and sells gold, zinc, lead and copper. The Company’s operating properties in Mexico include La Colorada Mine, Dolores and Alamo Dorado. The Company’s operating properties in Peru include Huaron Mine and Morococha Mine. The Company’s operating properties in Bolivia include San Vicente. The Company’s operating properties in Argentina include Manantial Espejo. The Company’s development properties include Navidad Property. The La Colorada underground silver mine is located in the Chalchihuites district in Zacatecas State, Mexico, approximately 99 kilometers south of Durango and 156 kilometers northwest of Zacatecas. The La Colorada consists of approximately 60 claims totaling approximately 8,400 hectares.

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