Amerigo Resources (NYSE: SCCO) and Southern Copper (NYSE:SCCO) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Institutional & Insider Ownership

7.5% of Southern Copper shares are owned by institutional investors. 0.5% of Southern Copper 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.

Volatility & Risk

Amerigo Resources has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500. Comparatively, Southern Copper has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Dividends

Southern Copper pays an annual dividend of $1.60 per share and has a dividend yield of 3.9%. Amerigo Resources does not pay a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Amerigo Resources and Southern Copper, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amerigo Resources 0 0 0 0 N/A
Southern Copper 4 4 2 0 1.80

Southern Copper has a consensus price target of $46.36, suggesting a potential upside of 12.08%. Given Southern Copper’s higher possible upside, analysts plainly believe Southern Copper is more favorable than Amerigo Resources.

Valuation and Earnings

This table compares Amerigo Resources and Southern Copper’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amerigo Resources $134.03 million 0.78 $7.98 million $0.04 14.75
Southern Copper $6.65 billion 4.80 $728.50 million N/A N/A

Southern Copper has higher revenue and earnings than Amerigo Resources.

Profitability

This table compares Amerigo Resources and Southern Copper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amerigo Resources 10.54% 15.04% 6.37%
Southern Copper 13.78% 15.50% 7.14%

Summary

Southern Copper beats Amerigo Resources on 12 of the 13 factors compared between the two stocks.

Amerigo Resources Company Profile

Amerigo Resources Ltd., through its subsidiary, produces and sells copper and molybdenum concentrates from Codelco's El Teniente underground mine in Chile. The company was formerly known as Golden Temple Mining Corp. and changed its name to Amerigo Resources Ltd. in March 2002. Amerigo Resources Ltd. was founded in 1984 and is headquartered in Vancouver, Canada.

Southern Copper Company Profile

Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Chile, and Ecuador. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant. The company also operates Buenavista, an open-pit copper mine, as well as two copper concentrators and three SX-EW plants in Mexico. In addition, it operates five underground mines that produce zinc, lead, copper, silver, and gold; a coal mine that produces coal and coke; and a zinc refinery. It has interests in 44,182 hectares of exploration concessions in Peru; 148,122 hectares of exploration concessions in Mexico; 64,899 hectares of exploration concessions in Argentina; 36,387 hectares of exploration concessions in Chile; and 7,298 hectares of exploration concessions in Ecuador. The company was founded in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation is a subsidiary of Americas Mining Corporation.

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