Analyzing Hudbay Minerals (HBM) and SOUTH32 Ltd/S (SOUHY)

Hudbay Minerals (NYSE: HBM) and SOUTH32 Ltd/S (OTCMKTS:SOUHY) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Profitability

This table compares Hudbay Minerals and SOUTH32 Ltd/S’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%
SOUTH32 Ltd/S N/A N/A N/A

Insider & Institutional Ownership

63.7% of Hudbay Minerals shares are owned by institutional investors. Comparatively, 0.3% of SOUTH32 Ltd/S shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Hudbay Minerals pays an annual dividend of $0.02 per share and has a dividend yield of 0.4%. SOUTH32 Ltd/S pays an annual dividend of $0.63 per share and has a dividend yield of 4.7%. Hudbay Minerals pays out 3.5% of its earnings in the form of a dividend. SOUTH32 Ltd/S pays out 58.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Earnings and Valuation

This table compares Hudbay Minerals and SOUTH32 Ltd/S’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hudbay Minerals $1.36 billion 0.99 $163.89 million $0.57 9.04
SOUTH32 Ltd/S $6.95 billion 1.98 $1.23 billion $1.08 12.47

SOUTH32 Ltd/S has higher revenue and earnings than Hudbay Minerals. Hudbay Minerals is trading at a lower price-to-earnings ratio than SOUTH32 Ltd/S, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Hudbay Minerals and SOUTH32 Ltd/S, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hudbay Minerals 0 3 6 0 2.67
SOUTH32 Ltd/S 1 2 2 0 2.20

Hudbay Minerals presently has a consensus target price of $11.38, indicating a potential upside of 120.87%. Given Hudbay Minerals’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Hudbay Minerals is more favorable than SOUTH32 Ltd/S.

Risk and Volatility

Hudbay Minerals has a beta of 2.96, indicating that its share price is 196% more volatile than the S&P 500. Comparatively, SOUTH32 Ltd/S has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500.

Summary

Hudbay Minerals beats SOUTH32 Ltd/S on 9 of the 15 factors compared between the two stocks.

About Hudbay Minerals

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.

About SOUTH32 Ltd/S

South32 Limited operates as a diversified metals and mining company primarily in Australia, Southern Africa, and South America. The company has a portfolio of assets producing alumina, aluminum, bauxite, energy and metallurgical coal, manganese ore and alloy, ferronickel, silver, lead, and zinc. It also exports its products. The company was formerly known as BHP Coal Holdings Pty Limited and changed its name to South32 Limited in March 2015. South32 Limited was incorporated in 2000 and is headquartered in Perth, Australia.

Receive News & Ratings for Hudbay Minerals Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Hudbay Minerals and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply