Luxfer Holdings PLC (NYSE: LXFR) and Southern Copper Corporation (NYSE:SCCO) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitabiliy, dividends, institutional ownership, earnings and valuation.

Profitability

This table compares Luxfer Holdings PLC and Southern Copper Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luxfer Holdings PLC 6.38% 17.93% 6.48%
Southern Copper Corporation 16.63% 16.35% 7.38%

Insider and Institutional Ownership

84.0% of Luxfer Holdings PLC shares are held by institutional investors. Comparatively, 6.3% of Southern Copper Corporation shares are held by institutional investors. 0.5% of Southern Copper Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Luxfer Holdings PLC and Southern Copper Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luxfer Holdings PLC 0 0 0 0 N/A
Southern Copper Corporation 3 2 2 0 1.86

Southern Copper Corporation has a consensus price target of $33.42, indicating a potential downside of 13.99%. Given Southern Copper Corporation’s higher possible upside, analysts clearly believe Southern Copper Corporation is more favorable than Luxfer Holdings PLC.

Risk & Volatility

Luxfer Holdings PLC has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Southern Copper Corporation has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Earnings and Valuation

This table compares Luxfer Holdings PLC and Southern Copper Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Luxfer Holdings PLC $409.40 million 0.81 $49.10 million $0.58 21.26
Southern Copper Corporation $5.91 billion 5.08 $2.61 billion $1.28 30.35

Southern Copper Corporation has higher revenue and earnings than Luxfer Holdings PLC. Luxfer Holdings PLC is trading at a lower price-to-earnings ratio than Southern Copper Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Luxfer Holdings PLC pays an annual dividend of $0.48 per share and has a dividend yield of 3.9%. Southern Copper Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 1.2%. Luxfer Holdings PLC pays out 82.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Southern Copper Corporation pays out 37.5% of its earnings in the form of a dividend.

Summary

Southern Copper Corporation beats Luxfer Holdings PLC on 11 of the 15 factors compared between the two stocks.

About Luxfer Holdings PLC

Luxfer Holdings PLC is a holding company. The Company is a materials technology company specializing in the design, manufacture and supply of materials, components and gas-containment devices for healthcare, environmental, protection and specialty end-markets. It operates through two divisions: Elektron and Gas Cylinders. Its Elektron Division focuses on specialty materials based primarily on magnesium, zirconium and rare earths. It sells its products through two brands, Magnesium Elektron and MEL Chemicals. Its Gas Cylinders Division manufactures and markets specialized products using aluminum, magnesium, carbon composites and steel. It sells its products through two brands, Luxfer Gas Cylinders and Superform. Its customers include both end users of its products and manufacturers that incorporate its products into finished goods. As of December 31, 2016, it had operated 20 manufacturing plants in the United States, the United Kingdom, Canada, France, the Czech Republic and China.

About Southern Copper Corporation

Southern Copper Corporation is an integrated copper producer. It produces copper and, in the production process, obtains several by-products, including molybdenum, silver, zinc, sulfuric acid and other metals. Its segments include the Peruvian operations, the Mexican open-pit operations and the Mexican underground mining operations segment identified as the IMMSA unit. The Peruvian operations segment includes the Toquepala and Cuajone mine complexes, and the smelting and refining plants, including a metals plant industrial railroad and port facilities that service both mines. The Mexican open-pit operations segment includes the La Caridad and Buenavista mine complexes, and the smelting and refining plants, including a metals plant and a copper rod plant, and support facilities that service both mines. As of December 31, 2016, the Mexican underground mining operations segment included five underground mines that produce zinc, copper, silver and gold, a coal mine and a zinc refinery.

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