Southern Copper (NYSE:SCCO) and Freeport-McMoRan (NYSE:FCX) are both large-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitability.
Volatility & Risk
Southern Copper has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Freeport-McMoRan has a beta of 2.27, suggesting that its share price is 127% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current recommendations and price targets for Southern Copper and Freeport-McMoRan, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Southern Copper | 5 | 3 | 0 | 0 | 1.38 |
Freeport-McMoRan | 0 | 4 | 13 | 1 | 2.83 |
Southern Copper presently has a consensus target price of $46.0625, suggesting a potential downside of 38.49%. Freeport-McMoRan has a consensus target price of $23.4375, suggesting a potential downside of 32.84%. Given Freeport-McMoRan's stronger consensus rating and higher probable upside, analysts plainly believe Freeport-McMoRan is more favorable than Southern Copper.
Earnings & Valuation
This table compares Southern Copper and Freeport-McMoRan's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Southern Copper | $7.29 billion | 7.95 | $1.49 billion | $1.92 | 39.01 |
Freeport-McMoRan | $14.40 billion | 3.53 | $-239,000,000.00 | $0.02 | 1,745.00 |
Southern Copper has higher earnings, but lower revenue than Freeport-McMoRan. Southern Copper is trading at a lower price-to-earnings ratio than Freeport-McMoRan, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
6.9% of Southern Copper shares are owned by institutional investors. Comparatively, 72.3% of Freeport-McMoRan shares are owned by institutional investors. 0.5% of Southern Copper shares are owned by insiders. Comparatively, 1.0% 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 is poised for long-term growth.
Profitability
This table compares Southern Copper and Freeport-McMoRan's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Southern Copper | 17.17% | 18.67% | 7.95% |
Freeport-McMoRan | -0.73% | 1.56% | 0.67% |
Summary
Freeport-McMoRan beats Southern Copper on 8 of the 15 factors compared between the two stocks.