Critical Review: Minco Capital (OTCMKTS:MGHCF) versus Franco-Nevada (NYSE:FNV)

Minco Capital (OTCMKTS:MGHCF) and Franco-Nevada (NYSE:FNV) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Minco Capital and Franco-Nevada, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Minco Capital	0	0	0	0	0.00
Franco-Nevada	0	5	9	0	2.64

Franco-Nevada has a consensus target price of $257.75, suggesting a potential upside of 16.66%. Given Franco-Nevada’s stronger consensus rating and higher probable upside, analysts plainly believe Franco-Nevada is more favorable than Minco Capital.

Institutional and Insider Ownership

77.1% of Franco-Nevada shares are held by institutional investors. 0.7% of Franco-Nevada shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Minco Capital has a beta of -0.07, meaning that its share price is 107% less volatile than the S&P 500. Comparatively, Franco-Nevada has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500.

Profitability

This table compares Minco Capital and Franco-Nevada’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Minco Capital	N/A	8.81%	8.63%
Franco-Nevada	65.12%	18.10%	16.82%

Earnings & Valuation

This table compares Minco Capital and Franco-Nevada”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Minco Capital	N/A	N/A	$3.36 million	$0.07	1.12
Franco-Nevada	$2.11 billion	20.24	$1.11 billion	$7.10	31.12

Franco-Nevada has higher revenue and earnings than Minco Capital. Minco Capital is trading at a lower price-to-earnings ratio than Franco-Nevada, indicating that it is currently the more affordable of the two stocks.

Summary

Franco-Nevada beats Minco Capital on 13 of the 13 factors compared between the two stocks.

About Minco Capital

Minco Capital Corp., an investment company, focuses on investing in public and private companies and assets to generate income and achieve long-term capital appreciation. The company was formerly known as Minco Gold Corporation and changed its name to Minco Capital Corp. in February 2019. Minco Capital Corp. was incorporated in 1982 and is headquartered in Vancouver, Canada.

About Franco-Nevada

Franco-Nevada Corporation operates as a gold-focused royalty and streaming company in South America, Central America, Mexico, the United States, Canada, and internationally. It operates through Mining and Energy segments. The company manages its portfolio with a focus on precious metals, such as gold, silver, and platinum group metals; and engages in the sale of crude oil, natural gas, and natural gas liquids through a third-party marketing agent. Franco-Nevada Corporation was founded in 1986 and is headquartered in Toronto, Canada.