Critical Survey: Hudbay Minerals (HBM) versus Mountain Province Diamonds (MPVD)

Hudbay Minerals (NYSE:HBM) and Mountain Province Diamonds (NASDAQ:MPVD) are both small-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Profitability

This table compares Hudbay Minerals and Mountain Province Diamonds’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hudbay Minerals 13.40% 8.66% 3.96%
Mountain Province Diamonds 1.94% 3.63% 1.57%

Dividends

Hudbay Minerals pays an annual dividend of $0.02 per share and has a dividend yield of 0.4%. Mountain Province Diamonds pays an annual dividend of $0.12 per share and has a dividend yield of 6.0%. Hudbay Minerals pays out 3.5% of its earnings in the form of a dividend. Mountain Province Diamonds pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings for Hudbay Minerals and Mountain Province Diamonds, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hudbay Minerals 0 4 4 0 2.50
Mountain Province Diamonds 0 0 1 0 3.00

Hudbay Minerals currently has a consensus price target of $8.38, indicating a potential upside of 69.19%. Given Hudbay Minerals’ higher probable upside, equities research analysts plainly believe Hudbay Minerals is more favorable than Mountain Province Diamonds.

Risk & Volatility

Hudbay Minerals has a beta of 2.96, suggesting that its stock price is 196% more volatile than the S&P 500. Comparatively, Mountain Province Diamonds has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500.

Insider & Institutional Ownership

58.1% of Hudbay Minerals shares are owned by institutional investors. Comparatively, 11.6% of Mountain Province Diamonds shares are owned by institutional investors. 4.8% of Mountain Province Diamonds shares are owned 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.

Earnings and Valuation

This table compares Hudbay Minerals and Mountain Province Diamonds’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hudbay Minerals $1.36 billion 0.95 $163.89 million $0.57 8.68
Mountain Province Diamonds $131.15 million 3.20 $13.23 million $0.08 25.00

Hudbay Minerals has higher revenue and earnings than Mountain Province Diamonds. Hudbay Minerals is trading at a lower price-to-earnings ratio than Mountain Province Diamonds, indicating that it is currently the more affordable of the two stocks.

Summary

Hudbay Minerals beats Mountain Province Diamonds on 11 of the 16 factors compared between the two stocks.

About Hudbay Minerals

Hudbay Minerals Inc., an integrated mining company, together with its subsidiaries, focuses on the discovery, production, and marketing of base and precious metals in North and South America. It produces copper concentrates containing copper, gold, and silver; and zinc metal. The company owns four polymetallic mines, four ore concentrators, and a zinc production facility in northern Manitoba and Saskatchewan, Canada, as well as in Cusco, Peru; and a copper project in Arizona, the United States. HudBay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.

About Mountain Province Diamonds

Mountain Province Diamonds Inc., through its wholly owned subsidiaries, focuses on the mining and marketing of rough diamonds worldwide. The company's primary asset is its 49% interest in the Gahcho Kué project comprising four mining leases covering an area of approximately 10,353 acres located in the Northwest Territories, Canada. The company was formerly known as Mountain Province Mining Inc. and changed its name to Mountain Province Diamonds Inc. in October 2000. Mountain Province Diamonds Inc. was founded in 1986 and is headquartered in Toronto, Canada.

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