Financial Analysis: Buenaventura (BVN) versus Nexa Resources (NEXA)

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

Profitability

This table compares Buenaventura and Nexa Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Buenaventura 1.41% 1.91% 1.36%
Nexa Resources 6.37% 5.78% 2.81%

Insider and Institutional Ownership

49.7% of Buenaventura shares are held by institutional investors. Comparatively, 14.7% of Nexa Resources shares are held by institutional investors. 19.3% of Buenaventura shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Buenaventura and Nexa Resources’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Buenaventura $1.27 billion 3.04 $60.82 million $0.37 41.16
Nexa Resources $2.45 billion 0.94 $126.88 million $1.42 12.13

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Buenaventura and Nexa Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Buenaventura 0 2 2 0 2.50
Nexa Resources 0 0 6 0 3.00

Buenaventura presently has a consensus target price of $17.30, suggesting a potential upside of 13.59%. Nexa Resources has a consensus target price of $22.52, suggesting a potential upside of 30.76%. Given Nexa Resources’ stronger consensus rating and higher probable upside, analysts plainly believe Nexa Resources is more favorable than Buenaventura.

Dividends

Buenaventura pays an annual dividend of $0.06 per share and has a dividend yield of 0.4%. Nexa Resources pays an annual dividend of $0.47 per share and has a dividend yield of 2.7%. Buenaventura pays out 16.2% of its earnings in the form of a dividend. Nexa Resources pays out 33.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Nexa Resources beats Buenaventura on 10 of the 15 factors compared between the two stocks.

Buenaventura Company Profile

Compañía de Minas Buenaventura S.A.A., a precious metals company, engages in the exploration, mining, and processing of gold, silver, lead, zinc, and copper metals in Peru. The company operates four directly operating mining units, including Orcopampa, Uchucchacua, Julcani, and Mallay; and two mining unites that are under development stage comprising Tambomayo and San Gabriel. It also owns interests in Colquijirca-Marcapunta, Tantahuatay, La Zanja, Yanacocha, San Gregorio, Daniela, Ccelloccasa, and Cerro Verde mines, as well as Trapiche, a mining unit at the development stage. In addition, the company provides electrical transmission services; energy generation services through hydroelectric plants; and geological, engineering, design, and construction consulting services to the mining sector, as well as engages in chemical processing activities. Compañía de Minas Buenaventura S.A.A. was founded in 1953 and is headquartered in Lima, Peru.

Nexa Resources Company Profile

Nexa Resources S.A., through its subsidiaries, primarily produces, refines, processes, and sells zinc in Peru and Brazil. It explores, extracts, produces, and trades zinc, copper, and lead concentrates through its mining sites located in the regions of Pasco, Ica, and Moquegua in Peru. The company also has copper mining project located in the Conchucos District, Ancash Region; poly-metallic mining project located in the Ancash Region; and copper mining project located in the Huancavelica Region, as well as zinc mines in Vazante and Paracatu. In addition, it refines byproducts, such as sulfuric acid, copper, and silver. The company serves chemical, petrochemical, rubber, pulp, metallurgy, mining, agricultural, and other sectors; and exports its zinc to Europe and the Americas. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is headquartered in Luxembourg City, Luxembourg. Nexa Resources S.A. is a subsidiary of Votorantim S.A.

Receive News & Ratings for Buenaventura Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Buenaventura and related companies with MarketBeat.com's FREE daily email newsletter.




Leave a Reply