McEwen Mining (NYSE: MUX) and Turquoise Hill Resources (NYSE:TRQ) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for McEwen Mining and Turquoise Hill Resources, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McEwen Mining 0 0 1 0 3.00
Turquoise Hill Resources 0 3 2 0 2.40

McEwen Mining presently has a consensus price target of $5.00, suggesting a potential upside of 76.68%. Turquoise Hill Resources has a consensus price target of $5.00, suggesting a potential upside of 51.52%. Given McEwen Mining’s stronger consensus rating and higher possible upside, research analysts plainly believe McEwen Mining is more favorable than Turquoise Hill Resources.

Dividends

McEwen Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.4%. Turquoise Hill Resources does not pay a dividend. McEwen Mining pays out -50.0% of its earnings in the form of a dividend.

Volatility and Risk

McEwen Mining has a beta of -1.32, meaning that its stock price is 232% less volatile than the S&P 500. Comparatively, Turquoise Hill Resources has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.

Valuation & Earnings

This table compares McEwen Mining and Turquoise Hill Resources’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
McEwen Mining $54.53 million 16.21 -$11.30 million ($0.02) -141.50
Turquoise Hill Resources $892.02 million 7.44 $159.41 million $0.06 55.01

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

Profitability

This table compares McEwen Mining and Turquoise Hill Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
McEwen Mining -9.19% -1.69% -1.51%
Turquoise Hill Resources 14.20% 1.60% 1.01%

Insider and Institutional Ownership

29.3% of McEwen Mining shares are held by institutional investors. Comparatively, 32.9% of Turquoise Hill Resources shares are held by institutional investors. 26.6% of McEwen Mining shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Turquoise Hill Resources beats McEwen Mining on 9 of the 15 factors compared between the two stocks.

McEwen Mining Company Profile

McEwen Mining Inc. is a mining and minerals production and exploration company. The Company is focused on precious and base metals in Argentina, Mexico and the United States. The Company’s segments include Mexico, Minera Santa Cruz S.A. (MSC), Nevada and Los Azules. The Mexico Operations segment includes properties, such as El Gallo 1 mine and the El Gallo 2 project. The MSC segment includes properties, such as the San Jose mine and other concessions located around the mine. The Company’s properties in Nevada segment include Gold Bar project and exploration properties. The Gold Bar project is a proposed mine project. The Los Azules segment includes various properties, such as Los Azules project, Chonchones project, Laganoso project, La Cerrada project and Other Argentina properties. The Los Azules copper project is an advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile.

Turquoise Hill Resources Company Profile

Turquoise Hill Resources Ltd. is an international mining company. The Company focuses on the operation and further development of the Oyu Tolgoi copper-gold mine in Southern Mongolia, which is the Company’s principal material mineral resource property. The Company’s Oyu Tolgoi mine is held through approximately 65% interest in Oyu Tolgoi LLC (Oyu Tolgoi) and the remaining approximately 35% interest is held by Erdenes Oyu Tolgoi LLC (Erdenes). The Company’s Oyu Tolgoi mine is located approximately 550 kilometers south of Ulaanbaatar, Mongolia’s capital city, and 80 kilometers north of the Mongolia-China border. The Company’s Mineralization on the property consists of porphyry-style copper, gold, silver and molybdenum contained in a linear structural trend (the Oyu Tolgoi Trend) of deposits throughout this trend. They include, from south to north, the Heruga Deposit, the Oyut deposit and the Hugo Dummett deposits (Hugo South, Hugo North and Hugo North Extension).

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