Southern Copper Corporation (NYSE: SCCO) and Ferroglobe PLC (NASDAQ:GSM) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Southern Copper Corporation and Ferroglobe PLC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern Copper Corporation 3 3 1 0 1.71
Ferroglobe PLC 0 1 4 0 2.80

Southern Copper Corporation presently has a consensus target price of $35.33, indicating a potential downside of 10.21%. Ferroglobe PLC has a consensus target price of $14.25, indicating a potential upside of 8.86%. Given Ferroglobe PLC’s stronger consensus rating and higher probable upside, analysts clearly believe Ferroglobe PLC is more favorable than Southern Copper Corporation.

Profitability

This table compares Southern Copper Corporation and Ferroglobe PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southern Copper Corporation 16.63% 16.35% 7.38%
Ferroglobe PLC 0.23% 1.27% 0.20%

Insider and Institutional Ownership

6.1% of Southern Copper Corporation shares are owned by institutional investors. Comparatively, 38.2% of Ferroglobe PLC shares are owned by institutional investors. 0.5% of Southern Copper Corporation shares are owned by insiders. Comparatively, 13.1% of Ferroglobe PLC shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Southern Copper Corporation $5.91 billion 5.15 $2.61 billion $1.28 30.74
Ferroglobe PLC $1.56 billion 1.44 $58.93 million ($0.42) -31.17

Southern Copper Corporation has higher revenue and earnings than Ferroglobe PLC. Ferroglobe PLC is trading at a lower price-to-earnings ratio than Southern Copper Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Southern Copper Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. Ferroglobe PLC does not pay a dividend. Southern Copper Corporation pays out 43.8% of its earnings in the form of a dividend.

Risk & Volatility

Southern Copper Corporation has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Ferroglobe PLC has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Summary

Southern Copper Corporation beats Ferroglobe PLC on 8 of the 15 factors compared between the two stocks.

Southern Copper Corporation Company Profile

Southern Copper Corporation is an integrated copper producer. It produces copper and, in the production process, obtains several by-products, including molybdenum, silver, zinc, sulfuric acid and other metals. Its segments include the Peruvian operations, the Mexican open-pit operations and the Mexican underground mining operations segment identified as the IMMSA unit. The Peruvian operations segment includes the Toquepala and Cuajone mine complexes, and the smelting and refining plants, including a metals plant industrial railroad and port facilities that service both mines. The Mexican open-pit operations segment includes the La Caridad and Buenavista mine complexes, and the smelting and refining plants, including a metals plant and a copper rod plant, and support facilities that service both mines. As of December 31, 2016, the Mexican underground mining operations segment included five underground mines that produce zinc, copper, silver and gold, a coal mine and a zinc refinery.

Ferroglobe PLC Company Profile

Ferroglobe PLC, formerly VeloNewco Limited, is engaged in silicon and specialty metals industry. The Company produces silicon metal and silicon- and manganese-based alloy, which serves customers in the chemical, aluminum, solar, steel and ductile iron foundry industries. It operates through two segments: Electrometallurgy and Energy. It Electrometallurgy segment includes its coal and quartz mining operations and its silicon metal and ferroalloy production, whereas the Energy segment consists of its hydroelectric power operations. It currently operates approximately 20 production smelting facilities in the field of electrometallurgy: approximately five in Spain, over five in the United States of America, over six in France, over three in South Africa, one in Venezuela, one in Poland, one in Canada, one in Argentina and one in China. It diversifies its production base across approximately five continents, such as Africa, Asia, Europe, North America and South America.

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