Critical Analysis: Vedanta Limited (VEDL) and HudBay Minerals (HBM)
Vedanta Limited (NYSE: VEDL) and HudBay Minerals (NYSE:HBM) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitabiliy, valuation, earnings, risk and institutional ownership.
Risk & Volatility
Vedanta Limited has a beta of 1.86, suggesting that its share price is 86% more volatile than the S&P 500. Comparatively, HudBay Minerals has a beta of 3.23, suggesting that its share price is 223% more volatile than the S&P 500.
Insider and Institutional Ownership
3.6% of Vedanta Limited shares are held by institutional investors. Comparatively, 63.9% of HudBay Minerals shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Vedanta Limited and HudBay Minerals’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Vedanta Limited||$11.24 billion||1.46||$3.34 billion||$1.02||17.28|
|HudBay Minerals||$1.13 billion||1.68||$469.48 million||($0.09)||-88.88|
Vedanta Limited has higher revenue and earnings than HudBay Minerals. HudBay Minerals is trading at a lower price-to-earnings ratio than Vedanta Limited, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and target prices for Vedanta Limited and HudBay Minerals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
HudBay Minerals has a consensus target price of $8.06, indicating a potential upside of 0.78%. Given HudBay Minerals’ higher possible upside, analysts clearly believe HudBay Minerals is more favorable than Vedanta Limited.
This table compares Vedanta Limited and HudBay Minerals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Vedanta Limited pays an annual dividend of $1.17 per share and has a dividend yield of 6.6%. HudBay Minerals pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Vedanta Limited pays out 114.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HudBay Minerals pays out -22.2% of its earnings in the form of a dividend.
Vedanta Limited beats HudBay Minerals on 8 of the 14 factors compared between the two stocks.
Vedanta Limited Company Profile
Vedanta Limited is a natural resource company engaged in the business of manufacturing copper and copper products, and aluminum and aluminum products. The Company’s segments include Copper, which consists of manufacturing of copper cathode, continuous cast copper rod and anode slime, including from purchased concentrate and manufacturing of precious metal from anode slime, sulfuric acid, phosphoric acid; Iron ore; Aluminium, which consists of manufacturing of alumina and various aluminum products; Power, which consists of power, including power facilities engaged in generation and sale of commercial power, and Other, which consists pig iron and metallurgical coke. Its iron ore business consists of iron ore exploration, mining, beneficiation and exports. The Company has iron ore mining operations in the States of Goa and Karnataka. Its copper business consists of custom smelting. Its power business consists of 2,400 megawatt thermal coal based power facility in the State of Odisha.
HudBay Minerals Company Profile
Hudbay Minerals Inc is a Canada-based mining company. The Company is engaged in the production of copper concentrate, consisting of copper, gold and silver, as well as zinc metal. The Company is focused on the discovery, production and marketing of base and precious metals. The Company has assets in North and South America. Through its subsidiaries, the Company owns approximately four polymetallic mines, four ore concentrators and a zinc production facility in northern Manitoba and Saskatchewan (Canada) and Cusco (Peru), as well as a copper project in Arizona (the United States). The Company owns Constancia mine, an open pit copper mine in Peru. It owns 777 mine, an underground copper, zinc, gold and silver mine in Flin Flon, Manitoba. It owns Lalor mine, an underground zinc, copper and gold mine near Snow Lake, Manitoba. It also owns Rosemont project, a copper development project in Pima County, Arizona, in the United States.
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