Freeport-McMoran (NYSE: FCX) and A-Mark Precious Metals (NASDAQ:AMRK) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

Volatility and Risk

Freeport-McMoran has a beta of 2.59, suggesting that its share price is 159% more volatile than the S&P 500. Comparatively, A-Mark Precious Metals has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500.

Institutional & Insider Ownership

69.9% of Freeport-McMoran shares are owned by institutional investors. Comparatively, 20.2% of A-Mark Precious Metals shares are owned by institutional investors. 1.4% of Freeport-McMoran shares are owned by insiders. Comparatively, 43.0% of A-Mark Precious Metals shares are owned by 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.

Earnings and Valuation

This table compares Freeport-McMoran and A-Mark Precious Metals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Freeport-McMoran $15.31 billion 1.40 $5.20 billion $0.71 20.80
A-Mark Precious Metals $7.40 billion 0.02 $10.53 million $0.97 18.51

Freeport-McMoran has higher revenue and earnings than A-Mark Precious Metals. A-Mark Precious Metals is trading at a lower price-to-earnings ratio than Freeport-McMoran, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Freeport-McMoran and A-Mark Precious Metals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Freeport-McMoran 3 10 2 0 1.93
A-Mark Precious Metals 0 1 1 1 3.00

Freeport-McMoran presently has a consensus price target of $13.86, suggesting a potential downside of 6.18%. A-Mark Precious Metals has a consensus price target of $21.53, suggesting a potential upside of 19.92%. Given A-Mark Precious Metals’ stronger consensus rating and higher probable upside, analysts plainly believe A-Mark Precious Metals is more favorable than Freeport-McMoran.

Profitability

This table compares Freeport-McMoran and A-Mark Precious Metals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Freeport-McMoran 5.97% 10.45% 2.60%
A-Mark Precious Metals 0.09% 10.08% 1.40%

Dividends

A-Mark Precious Metals pays an annual dividend of $0.32 per share and has a dividend yield of 1.8%. Freeport-McMoran does not pay a dividend. A-Mark Precious Metals pays out 33.0% of its earnings in the form of a dividend.

Summary

Freeport-McMoran beats A-Mark Precious Metals on 11 of the 17 factors compared between the two stocks.

About Freeport-McMoran

Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.

About A-Mark Precious Metals

A-Mark Precious Metals, Inc. is a precious metal trading company. The Company is a wholesaler of gold, silver, platinum and palladium bullion and related products, including bars, wafers, grain and coins. It distributes gold and silver coins and bars from sovereign and private mints; provides financing for the purchase of bullion and numismatics; offers storage for bullion, and offers complementary products, such as consignment, customized finance and liquidity programs, such as repurchase (Repo) accounts, and trade quotes in a variety of foreign currencies. It operates through various business units for accounting purposes, including Industrial, Coin and Bar, Trading, Finance, Collateral Finance Corporation, Transcontinental Depository Services and Logistics. It is an authorized distributor of gold and silver coins for sovereign mints and various private mints. The sovereign mints include the United States Mint, the Australian (Perth) Mint and the Austrian Mint, among others.

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