Financial Contrast: Freeport-McMoRan (FCX) vs. McEwen Mining (MUX)

Freeport-McMoRan (NYSE: FCX) and McEwen Mining (NYSE:MUX) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Risk & Volatility

Freeport-McMoRan has a beta of 2.54, suggesting that its stock price is 154% more volatile than the S&P 500. Comparatively, McEwen Mining has a beta of -1.42, suggesting that its stock price is 242% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Freeport-McMoRan and McEwen Mining, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Freeport-McMoRan 2 10 4 0 2.13
McEwen Mining 0 0 2 0 3.00

Freeport-McMoRan presently has a consensus price target of $15.69, suggesting a potential upside of 11.06%. McEwen Mining has a consensus price target of $5.00, suggesting a potential upside of 157.73%. Given McEwen Mining’s stronger consensus rating and higher possible upside, analysts plainly believe McEwen Mining is more favorable than Freeport-McMoRan.

Profitability

This table compares Freeport-McMoRan and McEwen Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Freeport-McMoRan 5.55% 16.28% 2.58%
McEwen Mining -9.19% -1.69% -1.51%

Valuation & Earnings

This table compares Freeport-McMoRan and McEwen Mining’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Freeport-McMoRan $15.31 billion 1.34 $5.20 billion $0.74 19.09
McEwen Mining $54.53 million 11.11 -$11.30 million ($0.02) -97.00

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

Insider and Institutional Ownership

68.0% of Freeport-McMoRan shares are owned by institutional investors. Comparatively, 27.8% of McEwen Mining shares are owned by institutional investors. 1.3% of Freeport-McMoRan shares are owned by company insiders. Comparatively, 26.6% of McEwen Mining shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Freeport-McMoRan beats McEwen Mining on 9 of the 13 factors compared between the two stocks.

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.

McEwen Mining Company Profile

McEwen Mining Inc. is a mining and minerals production and exploration company. The Company is focused on precious and base metals in Argentina, Mexico and the United States. The Company’s segments include Mexico, Minera Santa Cruz S.A. (MSC), Nevada and Los Azules. The Mexico Operations segment includes properties, such as El Gallo 1 mine and the El Gallo 2 project. The MSC segment includes properties, such as the San Jose mine and other concessions located around the mine. The Company’s properties in Nevada segment include Gold Bar project and exploration properties. The Gold Bar project is a proposed mine project. The Los Azules segment includes various properties, such as Los Azules project, Chonchones project, Laganoso project, La Cerrada project and Other Argentina properties. The Los Azules copper project is an advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile.

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