Reviewing Nexa Resources (NYSE:NEXA) and BHP Billiton (BBL)

Nexa Resources (NYSE: NEXA) and BHP Billiton (NYSE:BBL) are both mid-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

4.4% of BHP Billiton shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

BHP Billiton pays an annual dividend of $1.66 per share and has a dividend yield of 3.7%. Nexa Resources does not pay a dividend.

Profitability

This table compares Nexa Resources and BHP Billiton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nexa Resources 2.88% 2.16% 1.09%
BHP Billiton N/A N/A N/A

Valuation & Earnings

This table compares Nexa Resources and BHP Billiton’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nexa Resources $1.91 billion 1.19 $93.16 million $0.58 34.91
BHP Billiton $38.29 billion 1.25 $5.89 billion N/A N/A

BHP Billiton has higher revenue and earnings than Nexa Resources.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Nexa Resources and BHP Billiton, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nexa Resources 0 0 5 0 3.00
BHP Billiton 0 1 1 0 2.50

Nexa Resources currently has a consensus price target of $21.52, suggesting a potential upside of 6.27%. BHP Billiton has a consensus price target of $40.00, suggesting a potential downside of 11.66%. Given Nexa Resources’ stronger consensus rating and higher probable upside, analysts clearly believe Nexa Resources is more favorable than BHP Billiton.

Summary

Nexa Resources beats BHP Billiton on 6 of the 11 factors compared between the two stocks.

Nexa Resources Company Profile

Nexa Resources SA, formerly VM Holding SA, is a Luxembourg-based company engaged in the mineral resources industry. The Company is a metals and mining entity mainly engaged in zinc content production, and whose product portfolio also includes copper, lead, silver and gold. Its mining and smelting presence is located in Brazil, conducted by Votorantim Metais Zinco SA, and in Peru, conducted by Compania Minera Milpo SAA, and Votorantim Metais-Cajamarquilla SA. Its controlling shareholder is Votorantim SA, a Brazilian privately owned industrial conglomerate that holds ownership interests in metal, steel, cement, energy and pulp companies, among others.

BHP Billiton Company Profile

BHP Billiton Plc is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. It extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. It manages product distribution through its global logistics chain, including freight and pipeline transportation. It sells its products through direct supply agreements with its customers and on global commodity exchanges.

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