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

Insider & Institutional Ownership

64.0% of HudBay Minerals shares are held by institutional investors. Comparatively, 3.6% of Vedanta Limited shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for HudBay Minerals and Vedanta Limited, as reported by MarketBeat.com.

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

HudBay Minerals presently has a consensus price target of $8.06, indicating a potential upside of 16.01%. Given HudBay Minerals’ higher probable upside, analysts plainly believe HudBay Minerals is more favorable than Vedanta Limited.

Profitability

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

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

Volatility & Risk

HudBay Minerals has a beta of 3.23, indicating that its share price is 223% more volatile than the S&P 500. Comparatively, Vedanta Limited has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500.

Valuation & Earnings

This table compares HudBay Minerals and Vedanta Limited’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HudBay Minerals $1.13 billion 1.46 $469.48 million ($0.09) -77.21
Vedanta Limited $11.14 billion 1.41 $3.31 billion $1.02 16.59

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.

Dividends

HudBay Minerals pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Vedanta Limited pays an annual dividend of $1.17 per share and has a dividend yield of 6.9%. HudBay Minerals pays out -22.2% of its earnings in the form of a dividend. 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.

Summary

Vedanta Limited beats HudBay Minerals on 8 of the 15 factors compared between the two stocks.

HudBay Minerals Company Profile

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.

Vedanta Limited Company Profile

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.

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