Analyzing Fortuna Silver Mines (NYSE:FSM) & Nexa Resources (NEXA)

Nexa Resources (NYSE: NEXA) and Fortuna Silver Mines (NYSE:FSM) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Insider and Institutional Ownership

43.6% of Fortuna Silver Mines shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Nexa Resources and Fortuna Silver Mines’ gross 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 1.16 $93.16 million $0.58 33.88
Fortuna Silver Mines $210.30 million 3.46 $17.85 million $0.24 19.00

Nexa Resources has higher revenue and earnings than Fortuna Silver Mines. Fortuna Silver Mines is trading at a lower price-to-earnings ratio than Nexa Resources, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Nexa Resources and Fortuna Silver Mines’ 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%
Fortuna Silver Mines 15.44% 9.15% 7.26%

Analyst Ratings

This is a breakdown of current ratings and target prices for Nexa Resources and Fortuna Silver Mines, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nexa Resources 0 0 5 0 3.00
Fortuna Silver Mines 0 1 4 0 2.80

Nexa Resources currently has a consensus price target of $21.52, suggesting a potential upside of 9.52%. Fortuna Silver Mines has a consensus price target of $7.50, suggesting a potential upside of 64.47%. Given Fortuna Silver Mines’ higher probable upside, analysts plainly believe Fortuna Silver Mines is more favorable than Nexa Resources.

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.

Fortuna Silver Mines Company Profile

Fortuna Silver Mines Inc. is a Canada-based mining company engaged in silver mining and related activities in Latin America, including exploration, extraction and processing. The Company operates the Caylloma silver, lead, and zinc mine (Caylloma) in southern Peru and the San Jose silver and gold mine (San Jose) in southern Mexico. The Company’s segments include Corporate, Bateas and Cuzcatlan. The Company owns interest in the Caylloma mine and related mining concessions located in southern Peru. The Caylloma property is located in the Caylloma Mining District, approximately 220 kilometers north-northwest of Arequipa, Peru. The Company produces approximately 1.7 million ounces of silver and over 1,160 ounces of gold at Caylloma. The Company’s San Jose property, which covers a silver gold bearing epithermal vein system is located in the state of Oaxaca in southern Mexico. The Company produces approximately 4.9 million ounces of silver and over 38,530 ounces of gold at San Jose.

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