Rio Tinto PLC (NYSE: RIO) and MAG Silver Corp (NYSE:MAG) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, risk, earnings, dividends, analyst recommendations, institutional ownership and valuation.

Insider and Institutional Ownership

6.9% of Rio Tinto PLC shares are owned 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 and Earnings

This table compares Rio Tinto PLC and MAG Silver Corp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rio Tinto PLC $37.60 billion 2.38 $15.22 billion N/A N/A
MAG Silver Corp N/A N/A -$6.98 million N/A N/A

Rio Tinto PLC has higher revenue and earnings than MAG Silver Corp.

Profitability

This table compares Rio Tinto PLC and MAG Silver Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rio Tinto PLC N/A N/A N/A
MAG Silver Corp N/A -3.01% -3.00%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Rio Tinto PLC and MAG Silver Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rio Tinto PLC 1 3 14 0 2.72
MAG Silver Corp 0 0 5 2 3.29

Rio Tinto PLC presently has a consensus price target of $48.67, suggesting a potential downside of 2.69%. MAG Silver Corp has a consensus price target of $17.33, suggesting a potential upside of 48.40%. Given MAG Silver Corp’s stronger consensus rating and higher possible upside, analysts plainly believe MAG Silver Corp is more favorable than Rio Tinto PLC.

Dividends

Rio Tinto PLC pays an annual dividend of $2.37 per share and has a dividend yield of 4.7%. MAG Silver Corp does not pay a dividend.

Summary

Rio Tinto PLC beats MAG Silver Corp on 7 of the 10 factors compared between the two stocks.

Rio Tinto PLC Company Profile

Rio Tinto plc is a mining and metals company. The Company’s business is finding, mining and processing mineral resources. The Company’s segments include Iron Ore, Aluminium, Copper & Diamonds, Energy & Minerals and Other Operations. The Company operates an iron ore business, supplying the global seaborne iron ore trade. Its Iron Ore product operations are located in the Pilbara region of Western Australia. The Aluminium business includes bauxite mines, alumina refineries and aluminum smelters. Its bauxite mines are located in Australia, Brazil and Guinea. The Copper & Diamonds segment has managed operations in Australia, Canada, Mongolia and the United States, and non-managed operations in Chile and Indonesia. The Energy & Minerals segment consists of mining, refining and marketing operations in over 10 countries, across six sectors: borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium.

MAG Silver Corp Company Profile

MAG Silver Corp. is a mineral exploration and development company. The Company is focused on the acquisition, exploration and development of projects located within the Mexican silver belt. The Company operates through the exploration of mineral properties in Mexico segment. The Company’s projects include Juanicipio Property, Cinco De Mayo Property and Guigui Property. Juanicipio Property is located in the Fresnillo District, Zacatecas State, Mexico. The Juanicipio Property includes silver-gold-lead-zinc epithermal vein deposit. The Company owns the mineral concessions comprising the Cinco de Mayo Property. The Cinco de Mayo Property is located approximately 190 kilometers northwest of the city of Chihuahua, in northern Chihuahua State, Mexico, and covers approximately 25,110 hectares. The Company owns the Guigui project located in the Santa Eulalia Mining District of Chihuahua, Mexico. Guigui project consists of approximately 8,300 hectares.

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