Nexa Resources (NEXA) & Freeport-McMoran (FCX) Financial Analysis

Nexa Resources (NYSE: NEXA) and Freeport-McMoran (NYSE:FCX) are both mid-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Profitability

This table compares Nexa Resources and Freeport-McMoran’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nexa Resources N/A N/A N/A
Freeport-McMoran 6.20% 13.35% 3.52%

Institutional and Insider Ownership

68.1% of Freeport-McMoran shares are owned by institutional investors. 1.3% of Freeport-McMoran shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Nexa Resources and Freeport-McMoran, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nexa Resources 0 0 5 0 3.00
Freeport-McMoran 2 11 4 0 2.12

Nexa Resources presently has a consensus target price of $21.52, indicating a potential upside of 24.75%. Freeport-McMoran has a consensus target price of $15.69, indicating a potential upside of 11.22%. Given Nexa Resources’ stronger consensus rating and higher probable upside, equities analysts clearly believe Nexa Resources is more favorable than Freeport-McMoran.

Valuation & Earnings

This table compares Nexa Resources and Freeport-McMoran’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nexa Resources N/A N/A N/A $0.51 33.82
Freeport-McMoran $14.83 billion 1.38 -$4.32 billion $0.74 19.07

Nexa Resources has higher earnings, but lower revenue than Freeport-McMoran. Freeport-McMoran is trading at a lower price-to-earnings ratio than Nexa Resources, indicating that it is currently the more affordable of the two stocks.

Summary

Freeport-McMoran beats Nexa Resources on 7 of the 10 factors compared between the two stocks.

Nexa Resources Company Profile

Nexa Resources SA, formerly VM Holding SA, is a Luxembourg-based company engaged in the mineral resources industry. The Company is a metals and mining entity mainly engaged in zinc content production, and whose product portfolio also includes copper, lead, silver and gold. Its mining and smelting presence is located in Brazil, conducted by Votorantim Metais Zinco SA, and in Peru, conducted by Compania Minera Milpo SAA, and Votorantim Metais-Cajamarquilla SA. Its controlling shareholder is Votorantim SA, a Brazilian privately owned industrial conglomerate that holds ownership interests in metal, steel, cement, energy and pulp companies, among others.

Freeport-McMoran Company Profile

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.

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