Silvercorp Metals (OTCMKTS: SVMLF) and Pan American Silver Corp. (NASDAQ:PAAS) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitabiliy.

Analyst Ratings

This is a breakdown of current ratings and target prices for Silvercorp Metals and Pan American Silver Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silvercorp Metals 0 0 0 0 N/A
Pan American Silver Corp. 0 5 5 0 2.50

Pan American Silver Corp. has a consensus price target of $20.00, suggesting a potential upside of 24.38%. Given Pan American Silver Corp.’s higher possible upside, analysts clearly believe Pan American Silver Corp. is more favorable than Silvercorp Metals.

Insider & Institutional Ownership

0.0% of Silvercorp Metals shares are held by institutional investors. Comparatively, 49.6% of Pan American Silver Corp. shares are held by institutional investors. 12.9% of Pan American Silver Corp. shares are held 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.

Volatility & Risk

Silvercorp Metals has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Pan American Silver Corp. has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Valuation and Earnings

This table compares Silvercorp Metals and Pan American Silver Corp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Silvercorp Metals $148.83 million 3.69 $73.14 million $0.17 19.33
Pan American Silver Corp. $815.19 million 3.02 $294.08 million $0.77 20.88

Pan American Silver Corp. has higher revenue and earnings than Silvercorp Metals. Silvercorp Metals is trading at a lower price-to-earnings ratio than Pan American Silver Corp., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Silvercorp Metals and Pan American Silver Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silvercorp Metals 11.70% 3.84% 3.99%
Pan American Silver Corp. 14.56% 6.13% 4.58%

Dividends

Silvercorp Metals pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. Pan American Silver Corp. pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. Silvercorp Metals pays out 5.9% of its earnings in the form of a dividend. Pan American Silver Corp. pays out 13.0% 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

Pan American Silver Corp. beats Silvercorp Metals on 12 of the 15 factors compared between the two stocks.

Silvercorp Metals Company Profile

Silvercorp Metals Inc. (Silvercorp) is a silver-producing Canadian mining company. The Company is engaged in the acquisition, exploration, development, and mining of silver-related mineral properties in China. The Company’s segments include Mining, including projects, such as Henan Luoning, Hunan, Guangdong and Other, and Administrative, which includes Beijing and Vancouver. The Company is the primary silver producer in China through the operation of over four silver-lead-zinc mines in the Ying Mining District in Henan Province, China, including SGX, HZG, TLP, Haopinggou (HPG) and the LM mines. The Company also has commercial production at its Gaocheng (GC) silver-lead-zinc project in Guangdong Province. Silvercorp’s principal products and source of sales are silver-bearing lead and zinc concentrates and some direct smelting ores. The Company sells all its products to local smelters or companies in the mineral products trading business.

Pan American Silver Corp. Company Profile

Pan American Silver Corp. is a silver production company. The Company is principally engaged in the operation and development of, and exploration for, silver producing properties. The Company’s segments include Peru, Mexico, Argentina and Bolivia. The Company also produces and sells gold, zinc, lead and copper. The Company’s operating properties in Mexico include La Colorada Mine, Dolores and Alamo Dorado. The Company’s operating properties in Peru include Huaron Mine and Morococha Mine. The Company’s operating properties in Bolivia include San Vicente. The Company’s operating properties in Argentina include Manantial Espejo. The Company’s development properties include Navidad Property. The La Colorada underground silver mine is located in the Chalchihuites district in Zacatecas State, Mexico, approximately 99 kilometers south of Durango and 156 kilometers northwest of Zacatecas. The La Colorada consists of approximately 60 claims totaling approximately 8,400 hectares.

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