Fortuna Silver Mines (NYSE: FSM) and Teck Resources (NYSE:TECK) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Fortuna Silver Mines and Teck Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fortuna Silver Mines 15.97% 9.08% 7.07%
Teck Resources 17.93% 13.01% 6.62%

Valuation & Earnings

This table compares Fortuna Silver Mines and Teck Resources’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fortuna Silver Mines $251.82 million 2.96 $118.59 million $0.25 18.72
Teck Resources $9.25 billion 1.37 $3.83 billion $2.66 8.26

Teck Resources has higher revenue and earnings than Fortuna Silver Mines. Teck Resources is trading at a lower price-to-earnings ratio than Fortuna Silver Mines, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Fortuna Silver Mines and Teck Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fortuna Silver Mines 0 1 3 1 3.00
Teck Resources 1 0 22 0 2.91

Fortuna Silver Mines presently has a consensus target price of $9.00, suggesting a potential upside of 92.31%. Teck Resources has a consensus target price of $29.81, suggesting a potential upside of 35.74%. Given Fortuna Silver Mines’ stronger consensus rating and higher possible upside, research analysts clearly believe Fortuna Silver Mines is more favorable than Teck Resources.

Institutional and Insider Ownership

44.7% of Fortuna Silver Mines shares are held by institutional investors. Comparatively, 46.7% of Teck Resources shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Fortuna Silver Mines has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500. Comparatively, Teck Resources has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Dividends

Teck Resources pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Fortuna Silver Mines does not pay a dividend. Teck Resources pays out 3.0% of its earnings in the form of a dividend.

Summary

Teck Resources beats Fortuna Silver Mines on 9 of the 16 factors compared between the two stocks.

Fortuna Silver Mines Company Profile

Fortuna Silver Mines Inc. is a Canada-based mining company engaged in silver mining and related activities in Latin America, including exploration, extraction and processing. The Company operates the Caylloma silver, lead, and zinc mine (Caylloma) in southern Peru and the San Jose silver and gold mine (San Jose) in southern Mexico. The Company’s segments include Corporate, Bateas and Cuzcatlan. The Company owns interest in the Caylloma mine and related mining concessions located in southern Peru. The Caylloma property is located in the Caylloma Mining District, approximately 220 kilometers north-northwest of Arequipa, Peru. The Company produces approximately 1.7 million ounces of silver and over 1,160 ounces of gold at Caylloma. The Company’s San Jose property, which covers a silver gold bearing epithermal vein system is located in the state of Oaxaca in southern Mexico. The Company produces approximately 4.9 million ounces of silver and over 38,530 ounces of gold at San Jose.

Teck Resources Company Profile

Teck Resources Ltd is engaged in the business of exploring for, acquiring, developing and producing natural resources. The Company’s activities are organized into business units that are focused on steelmaking coal, copper, zinc and energy. It operates in five segments: steelmaking coal, copper, zinc, energy and corporate. The corporate segment includes all of its activities in commodities other than copper, coal, zinc and energy. Through its interests in mining and processing operations in Canada, the United States, Chile and Peru, the Company is a seaborne exporter of steelmaking coal, and producer of copper and mined zinc. It also produces lead, molybdenum, silver, and various specialty and other metals, chemicals and fertilizers. In addition, the Company owns interest in the Fort Hills oil sands project and interests in other assets in the Athabasca region of Alberta. It is engaged in advancing porphyry copper projects in Canada, Chile, Peru, the United States and Turkey.

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