Tahoe Resources (NYSE: TAHO) and Stillwater Mining (NYSE:SWC) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitabiliy.

Insider and Institutional Ownership

65.2% of Tahoe Resources shares are held by institutional investors. Comparatively, 89.3% of Stillwater Mining shares are held by institutional investors. 0.2% of Stillwater Mining shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Tahoe Resources and Stillwater Mining’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tahoe Resources $903.42 million 1.95 $450.60 million $0.49 11.53
Stillwater Mining N/A N/A N/A $0.07 257.14

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

Volatility & Risk

Tahoe Resources has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Stillwater Mining has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.

Profitability

This table compares Tahoe Resources and Stillwater Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tahoe Resources 17.13% 8.40% 7.13%
Stillwater Mining 2.80% 2.63% 1.83%

Dividends

Tahoe Resources pays an annual dividend of $0.24 per share and has a dividend yield of 4.2%. Stillwater Mining does not pay a dividend. Tahoe Resources pays out 49.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations for Tahoe Resources and Stillwater Mining, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tahoe Resources 0 7 1 0 2.13
Stillwater Mining 0 2 1 0 2.33

Tahoe Resources presently has a consensus price target of $19.50, indicating a potential upside of 245.13%. Stillwater Mining has a consensus price target of $18.67, indicating a potential upside of 3.70%. Given Tahoe Resources’ higher probable upside, analysts clearly believe Tahoe Resources is more favorable than Stillwater Mining.

Summary

Tahoe Resources beats Stillwater Mining on 7 of the 12 factors compared between the two stocks.

Tahoe Resources Company Profile

Tahoe Resources Inc. is a mine operations, and mineral exploration and development company. The Company’s principal business activities are the exploration, development, operation and acquisition of mineral properties for the mining of precious metals in the Americas. Its business involves operating the Escobal mine, a silver mining operation located in southeastern Guatemala, the La Arena and Shahuindo mines, gold mining operations located in northwestern Peru, and the Bell Creek mine and mill and the Timmins West mine, gold mining operations located in northeastern Ontario, Canada. Its additional business objectives include the expansion of gold production at the Shahuindo and Bell Creek mines, the development of the Whitney Project and the ongoing exploration programs in Peru and Canada. It focuses on the initial evaluation of exploration/development projects with the main projects being the La Arena copper-gold sulfide project in Peru and the Fenn-Gib gold project in Canada.

Stillwater Mining Company Profile

Stillwater Mining Company is engaged in the development, extraction, processing, smelting and refining of palladium, platinum and associated metals (platinum group metals (PGMs)) produced by mining a geological formation in south-central Montana, known as the J-M Reef. The Company operates through five segments: Mine Production, PGM Recycling, Canadian Properties, South American Properties and All Other. The Company is engaged in recycling spent catalytic converters and other industrial sources. The Company is also engaged in expanding its mining development along the J-M Reef, and holds exploration-stage properties at the Marathon PGM copper property, adjacent to Lake Superior in northern Ontario, Canada (Marathon), and at the Altar copper-gold property in San Juan province, Argentina. In addition to palladium and platinum, the Company’s operations produce associated by-product metals, including nickel, copper and minor amounts of gold, silver and rhodium.

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