Turquoise Hill Resources (NYSE: TRQ) and Freeport-McMoran (NYSE:FCX) are both mid-cap basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.
Institutional and Insider Ownership
32.9% of Turquoise Hill Resources shares are owned by institutional investors. Comparatively, 67.9% of Freeport-McMoran shares are owned by institutional investors. 1.4% of Freeport-McMoran shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Turquoise Hill Resources and Freeport-McMoran’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Turquoise Hill Resources||$892.02 million||7.08||$159.41 million||$0.06||52.34|
|Freeport-McMoran||$15.31 billion||1.32||$5.20 billion||$0.71||19.69|
Freeport-McMoran has higher revenue and earnings than Turquoise Hill Resources. Freeport-McMoran is trading at a lower price-to-earnings ratio than Turquoise Hill Resources, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Turquoise Hill Resources has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Freeport-McMoran has a beta of 2.57, meaning that its stock price is 157% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for Turquoise Hill Resources and Freeport-McMoran, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Turquoise Hill Resources||0||3||3||0||2.50|
Turquoise Hill Resources currently has a consensus target price of $5.00, indicating a potential upside of 59.24%. Freeport-McMoran has a consensus target price of $15.34, indicating a potential upside of 9.71%. Given Turquoise Hill Resources’ stronger consensus rating and higher probable upside, equities analysts clearly believe Turquoise Hill Resources is more favorable than Freeport-McMoran.
This table compares Turquoise Hill Resources and Freeport-McMoran’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Turquoise Hill Resources||14.20%||1.60%||1.01%|
Freeport-McMoran beats Turquoise Hill Resources on 9 of the 14 factors compared between the two stocks.
Turquoise Hill Resources Company Profile
Turquoise Hill Resources Ltd. is an international mining company. The Company focuses on the operation and further development of the Oyu Tolgoi copper-gold mine in Southern Mongolia, which is the Company’s principal material mineral resource property. The Company’s Oyu Tolgoi mine is held through approximately 65% interest in Oyu Tolgoi LLC (Oyu Tolgoi) and the remaining approximately 35% interest is held by Erdenes Oyu Tolgoi LLC (Erdenes). The Company’s Oyu Tolgoi mine is located approximately 550 kilometers south of Ulaanbaatar, Mongolia’s capital city, and 80 kilometers north of the Mongolia-China border. The Company’s Mineralization on the property consists of porphyry-style copper, gold, silver and molybdenum contained in a linear structural trend (the Oyu Tolgoi Trend) of deposits throughout this trend. They include, from south to north, the Heruga Deposit, the Oyut deposit and the Hugo Dummett deposits (Hugo South, Hugo North and Hugo North Extension).
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.
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