Financial Review: Gatos Silver (NYSE:GATO) & Hycroft Mining (NASDAQ:HYMC)

Gatos Silver (NYSE:GATO) and Hycroft Mining (NASDAQ:HYMC) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Earnings & Valuation

This table compares Gatos Silver and Hycroft Mining’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gatos Silver	N/A	N/A	$12.86 million	$0.19	55.37
Hycroft Mining	$33.23 million	2.17	-$55.02 million	($2.90)	-1.18

Gatos Silver has higher earnings, but lower revenue than Hycroft Mining. Hycroft Mining is trading at a lower price-to-earnings ratio than Gatos Silver, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Gatos Silver and Hycroft Mining’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gatos Silver	N/A	3.63%	3.33%
Hycroft Mining	N/A	-178.38%	-25.25%

Risk & Volatility

Gatos Silver has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500. Comparatively, Hycroft Mining has a beta of 2, meaning that its stock price is 100% more volatile than the S&P 500.

Insider & Institutional Ownership

44.8% of Gatos Silver shares are held by institutional investors. Comparatively, 7.4% of Hycroft Mining shares are held by institutional investors. 1.5% of Gatos Silver shares are held by insiders. Comparatively, 1.2% of Hycroft Mining shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Gatos Silver and Hycroft Mining, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gatos Silver	0	2	2	0	2.50
Hycroft Mining	0	0	0	0	N/A

Gatos Silver presently has a consensus price target of $10.25, indicating a potential downside of 2.57%. Given Gatos Silver’s higher possible upside, analysts clearly believe Gatos Silver is more favorable than Hycroft Mining.

Summary

Gatos Silver beats Hycroft Mining on 9 of the 10 factors compared between the two stocks.

About Gatos Silver

Gatos Silver, Inc. engages in the exploration, development, and production of precious metals. It primarily explores for silver deposits. The company also explores for zinc, lead, copper, and gold ores. Its flagship asset is the Los Gatos District, including the Cerro Los Gatos mine in Chihuahua, Mexico. The company was formerly known as Sunshine Silver Mining & Refining Corporation and changed its name to Gatos Silver, Inc. in October 2020. Gatos Silver, Inc. was incorporated in 2009 and is headquartered in Vancouver, Canada.

About Hycroft Mining

Hycroft Mining Holding Corporation, together with its subsidiaries, operates as a gold and silver development company in the United States. The company holds interests in the Hycroft mine that consists of 30 private parcels with patented claims comprising approximately 1,787 acres, and 3,247 unpatented mining claims that encompass approximately 62,298 acres located in the state of Nevada. Hycroft Mining Holding Corporation is based in Winnemucca, Nevada.