Reviewing Mesabi Trust (NYSE:MSB) & Hecla Mining (NYSE:HL)

Mesabi Trust (NYSE:MSB) and Hecla Mining (NYSE:HL) are both materials companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Mesabi Trust and Hecla Mining”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mesabi Trust	$17.52 million	14.34	$13.87 million	$0.49	39.08
Hecla Mining	$1.42 billion	7.08	$321.71 million	$0.49	30.62

Hecla Mining has higher revenue and earnings than Mesabi Trust. Hecla Mining is trading at a lower price-to-earnings ratio than Mesabi Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mesabi Trust and Hecla Mining’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mesabi Trust	54.46%	33.50%	28.16%
Hecla Mining	20.84%	18.91%	14.58%

Risk and Volatility

Mesabi Trust has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, Hecla Mining has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500.

Dividends

Mesabi Trust pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. Hecla Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Mesabi Trust pays out 40.8% of its earnings in the form of a dividend. Hecla Mining pays out 2.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a summary of current ratings and target prices for Mesabi Trust and Hecla Mining, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mesabi Trust	0	1	0	0	2.00
Hecla Mining	1	5	4	0	2.30

Hecla Mining has a consensus target price of $23.34, indicating a potential upside of 55.57%. Given Hecla Mining’s stronger consensus rating and higher probable upside, analysts clearly believe Hecla Mining is more favorable than Mesabi Trust.

Institutional and Insider Ownership

63.0% of Hecla Mining shares are held by institutional investors. 0.3% of Mesabi Trust shares are held by company insiders. Comparatively, 0.7% of Hecla Mining shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Hecla Mining beats Mesabi Trust on 9 of the 15 factors compared between the two stocks.

About Mesabi Trust

Mesabi Trust, a royalty trust, engages in iron ore mining business in the United States. Mesabi Trust was founded in 1961 and is based in New York, New York.

About Hecla Mining

Hecla Mining Company, together with its subsidiaries, provides precious and base metal properties in the United States, Canada, Japan, Korea, and China. The company mines for silver, gold, lead, and zinc concentrates, as well as carbon material containing silver and gold for custom smelters, metal traders, and third-party processors; and doré containing silver and gold. It flagship project is the Greens Creek mine located on Admiralty Island in southeast Alaska. Hecla Mining Company was incorporated in 1891 and is headquartered in Coeur d'Alene, Idaho.