Freeport-McMoran (NYSE: FCX) and Teck Resources (NYSE:TECK) are both large-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.
This is a summary of recent ratings and recommmendations for Freeport-McMoran and Teck Resources, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Freeport-McMoran currently has a consensus price target of $15.69, indicating a potential upside of 5.82%. Teck Resources has a consensus price target of $31.65, indicating a potential upside of 39.20%. Given Teck Resources’ stronger consensus rating and higher probable upside, analysts plainly believe Teck Resources is more favorable than Freeport-McMoran.
Valuation & Earnings
This table compares Freeport-McMoran and Teck Resources’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Freeport-McMoran||$15.31 billion||1.40||$5.20 billion||$0.71||20.89|
|Teck Resources||$9.52 billion||1.38||$3.94 billion||$2.66||8.55|
Freeport-McMoran has higher revenue and earnings than Teck Resources. Teck Resources is trading at a lower price-to-earnings ratio than Freeport-McMoran, indicating that it is currently the more affordable of the two stocks.
This table compares Freeport-McMoran and Teck Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Teck Resources pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Freeport-McMoran does not pay a dividend. Teck Resources pays out 3.0% of its earnings in the form of a dividend.
Insider and Institutional Ownership
68.0% of Freeport-McMoran shares are held by institutional investors. Comparatively, 46.8% of Teck Resources shares are held by institutional investors. 1.3% of Freeport-McMoran shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Freeport-McMoran has a beta of 2.54, suggesting that its stock price is 154% more volatile than the S&P 500. Comparatively, Teck Resources has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.
Freeport-McMoran Company Profile
Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.
Teck Resources Company Profile
Teck Resources Ltd is engaged in the business of exploring for, acquiring, developing and producing natural resources. The Company’s activities are organized into business units that are focused on steelmaking coal, copper, zinc and energy. It operates in five segments: steelmaking coal, copper, zinc, energy and corporate. The corporate segment includes all of its activities in commodities other than copper, coal, zinc and energy. Through its interests in mining and processing operations in Canada, the United States, Chile and Peru, the Company is a seaborne exporter of steelmaking coal, and producer of copper and mined zinc. It also produces lead, molybdenum, silver, and various specialty and other metals, chemicals and fertilizers. In addition, the Company owns interest in the Fort Hills oil sands project and interests in other assets in the Athabasca region of Alberta. It is engaged in advancing porphyry copper projects in Canada, Chile, Peru, the United States and Turkey.
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