Financial Contrast: OR Royalties (NYSE:OR) vs. HudBay Minerals (NYSE:HBM)

OR Royalties (NYSE:OR) and HudBay Minerals (NYSE:HBM) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Earnings and Valuation

This table compares OR Royalties and HudBay Minerals”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OR Royalties	$277.37 million	24.39	$206.09 million	$1.34	26.92
HudBay Minerals	$2.21 billion	5.05	$568.50 million	$1.66	16.94

HudBay Minerals has higher revenue and earnings than OR Royalties. HudBay Minerals is trading at a lower price-to-earnings ratio than OR Royalties, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

68.5% of OR Royalties shares are owned by institutional investors. Comparatively, 57.8% of HudBay Minerals shares are owned by institutional investors. 0.6% of OR Royalties shares are owned by insiders. Comparatively, 0.3% of HudBay Minerals shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares OR Royalties and HudBay Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OR Royalties	78.09%	15.10%	13.77%
HudBay Minerals	27.75%	10.04%	5.36%

Volatility and Risk

OR Royalties has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, HudBay Minerals has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for OR Royalties and HudBay Minerals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OR Royalties	0	4	5	1	2.70
HudBay Minerals	0	2	10	2	3.00

OR Royalties currently has a consensus target price of $46.50, indicating a potential upside of 28.90%. HudBay Minerals has a consensus target price of $27.33, indicating a potential downside of 2.80%. Given OR Royalties’ higher probable upside, analysts plainly believe OR Royalties is more favorable than HudBay Minerals.

Dividends

OR Royalties pays an annual dividend of $0.22 per share and has a dividend yield of 0.6%. HudBay Minerals pays an annual dividend of $0.03 per share and has a dividend yield of 0.1%. OR Royalties pays out 16.4% of its earnings in the form of a dividend. HudBay Minerals pays out 1.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. OR Royalties has increased its dividend for 1 consecutive years. OR Royalties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

OR Royalties beats HudBay Minerals on 10 of the 18 factors compared between the two stocks.

About OR Royalties

Osisko Gold Royalties Ltd acquires and manages precious metal and other royalties, streams, and other interests in Canada and internationally. It also owns options on offtake; royalty/stream financings; and exclusive rights to participate in future royalty/stream financings on various projects. The company’s primary asset is a 3-5% net smelter return royalty on the Canadian Malartic complex located in Canada. In addition, it is involved in the exploration, evaluation, and development of mining projects. It primarily explores for precious metals, including gold, silver, diamond, and others. Osisko Gold Royalties Ltd was founded in 2014 and is headquartered in Montreal, Canada.

About HudBay Minerals

Hudbay Minerals Inc., a diversified mining company, focuses on the exploration, development, operation, and optimization of properties in North and South America. It produces copper concentrates containing gold, silver, and molybdenum; gold concentrates containing zinc; zinc concentrates; molybdenum concentrates; and silver/gold doré. The company's flagship project is the 100% owned Constancia mine located in the Province of Chumbivilcas in southern Peru. Hudbay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.