Vedanta Limited (NYSE: VEDL) and HudBay Minerals (NYSE:HBM) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitabiliy, institutional ownership, valuation and risk.

Dividends

Vedanta Limited pays an annual dividend of $1.17 per share and has a dividend yield of 8.0%. HudBay Minerals pays an annual dividend of $0.02 per share and has a dividend yield of 0.4%. Vedanta Limited pays out 114.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HudBay Minerals pays out -22.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Vedanta Limited and HudBay Minerals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vedanta Limited $11.20 billion 0.86 $3.37 billion $1.02 14.32
HudBay Minerals $1.13 billion 0.99 $469.48 million ($0.09) -52.22

Vedanta Limited has higher revenue and earnings than HudBay Minerals. HudBay Minerals is trading at a lower price-to-earnings ratio than Vedanta Limited, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

3.6% of Vedanta Limited shares are held by institutional investors. Comparatively, 64.1% of HudBay Minerals shares are held by institutional investors. 62.9% of Vedanta Limited shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Vedanta Limited has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500. Comparatively, HudBay Minerals has a beta of 3.21, indicating that its stock price is 221% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Vedanta Limited and HudBay Minerals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vedanta Limited 1 0 3 0 2.50
HudBay Minerals 1 2 4 0 2.43

HudBay Minerals has a consensus target price of $8.06, indicating a potential upside of 71.54%. Given HudBay Minerals’ higher probable upside, analysts clearly believe HudBay Minerals is more favorable than Vedanta Limited.

Profitability

This table compares Vedanta Limited and HudBay Minerals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vedanta Limited 7.16% 13.39% 5.43%
HudBay Minerals -1.92% 2.34% 0.93%

Summary

Vedanta Limited beats HudBay Minerals on 9 of the 16 factors compared between the two stocks.

About Vedanta Limited

Vedanta Limited is a natural resource company engaged in the business of manufacturing copper and copper products, and aluminum and aluminum products. The Company’s segments include Copper, which consists of manufacturing of copper cathode, continuous cast copper rod and anode slime, including from purchased concentrate and manufacturing of precious metal from anode slime, sulfuric acid, phosphoric acid; Iron ore; Aluminium, which consists of manufacturing of alumina and various aluminum products; Power, which consists of power, including power facilities engaged in generation and sale of commercial power, and Other, which consists pig iron and metallurgical coke. Its iron ore business consists of iron ore exploration, mining, beneficiation and exports. The Company has iron ore mining operations in the States of Goa and Karnataka. Its copper business consists of custom smelting. Its power business consists of 2,400 megawatt thermal coal based power facility in the State of Odisha.

About HudBay Minerals

Hudbay Minerals Inc is a Canada-based mining company. The Company is engaged in the production of copper concentrate, consisting of copper, gold and silver, as well as zinc metal. The Company is focused on the discovery, production and marketing of base and precious metals. The Company has assets in North and South America. Through its subsidiaries, the Company owns approximately four polymetallic mines, four ore concentrators and a zinc production facility in northern Manitoba and Saskatchewan (Canada) and Cusco (Peru), as well as a copper project in Arizona (the United States). The Company owns Constancia mine, an open pit copper mine in Peru. It owns 777 mine, an underground copper, zinc, gold and silver mine in Flin Flon, Manitoba. It owns Lalor mine, an underground zinc, copper and gold mine near Snow Lake, Manitoba. It also owns Rosemont project, a copper development project in Pima County, Arizona, in the United States.

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