Teck Resources (NYSE:TECK) versus South32 (OTCMKTS:SOUHY) Financial Analysis

South32 (OTCMKTS:SOUHY) and Teck Resources (NYSE:TECK) are both large-cap basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Profitability

This table compares South32 and Teck Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South32	N/A	N/A	N/A
Teck Resources	11.93%	4.14%	2.41%

Institutional & Insider Ownership

0.1% of South32 shares are held by institutional investors. Comparatively, 78.1% of Teck Resources shares are held by institutional investors. 0.2% of South32 shares are held by company insiders. Comparatively, 0.1% of Teck Resources shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

South32 pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Teck Resources pays an annual dividend of $0.35 per share and has a dividend yield of 0.6%. Teck Resources pays out 19.7% of its earnings in the form of a dividend.

Risk & Volatility

South32 has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Teck Resources has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for South32 and Teck Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South32	0	6	0	1	2.29
Teck Resources	0	12	8	2	2.55

Teck Resources has a consensus price target of $53.33, indicating a potential downside of 3.01%. Given Teck Resources’ stronger consensus rating and higher probable upside, analysts clearly believe Teck Resources is more favorable than South32.

Earnings & Valuation

This table compares South32 and Teck Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South32	$5.78 billion	2.44	$213.00 million	N/A	N/A
Teck Resources	$10.48 billion	2.52	$296.30 million	$1.78	30.89

Teck Resources has higher revenue and earnings than South32.

Summary

Teck Resources beats South32 on 12 of the 15 factors compared between the two stocks.

About South32

South32 Limited operates as a diversified metals and mining company in Australia, India, China, Japan, the Middle East, Mozambique, the Netherlands, Brazil, Russia, South Africa, South Korea, the United States, and internationally. The company operates through Worsley Alumina, Brazil Alumina, Brazil Aluminium, Hillside Aluminium, Mozal Aluminium, Sierra Gorda, Cannington, Hermosa, Cerro Matoso, Illawarra Metallurgical Coal, Australia Manganese, and South Africa Manganese segments. It has a portfolio of assets producing bauxite, alumina, aluminum, copper, silver, lead, zinc, nickel, metallurgical coal, manganese, ferronickel, and other base metals. The company also exports its products. South32 Limited was incorporated in 2000 and is headquartered in Perth, Australia.

About Teck Resources

Teck Resources Limited engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. The company operates through Steelmaking Coal, Copper, Zinc, and Energy segments. Its principal products include copper, zinc, steelmaking coal, and blended bitumen. The company also produces lead, silver, and molybdenum; and various specialty and other metals, chemicals, and fertilizers. In addition, it explores for gold. The company was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in April 2009. The company was founded in 1913 and is headquartered in Vancouver, Canada.