BHP Billiton (NYSE:BHP) and First Quantum Minerals (OTCMKTS:FQVLF) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Profitability

This table compares BHP Billiton and First Quantum Minerals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BHP Billiton N/A N/A N/A
First Quantum Minerals 0.41% 4.39% 2.09%

Volatility and Risk

BHP Billiton has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, First Quantum Minerals has a beta of 3.26, suggesting that its stock price is 226% more volatile than the S&P 500.

Institutional & Insider Ownership

3.3% of BHP Billiton shares are owned by institutional investors. Comparatively, 0.0% of First Quantum Minerals shares are owned by institutional investors. 0.0% of BHP Billiton shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

BHP Billiton pays an annual dividend of $2.52 per share and has a dividend yield of 5.3%. First Quantum Minerals pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. BHP Billiton pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares BHP Billiton and First Quantum Minerals’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BHP Billiton $43.64 billion 1.76 $3.71 billion $3.36 14.23
First Quantum Minerals $3.31 billion 2.33 -$316.00 million N/A N/A

BHP Billiton has higher revenue and earnings than First Quantum Minerals.

Analyst Recommendations

This is a summary of recent ratings and price targets for BHP Billiton and First Quantum Minerals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BHP Billiton 0 7 5 0 2.42
First Quantum Minerals 0 3 3 1 2.71

BHP Billiton currently has a consensus price target of $47.00, indicating a potential downside of 1.69%. Given BHP Billiton’s higher probable upside, equities research analysts plainly believe BHP Billiton is more favorable than First Quantum Minerals.

Summary

First Quantum Minerals beats BHP Billiton on 9 of the 16 factors compared between the two stocks.

BHP Billiton Company Profile

BHP Billiton Limited discovers, acquires, develops, and markets natural resources worldwide. It operates through four segments: Petroleum, Copper, Iron Ore, and Coal. The company explores for copper, silver, lead, zinc, molybdenum, uranium, gold, and iron ores, as well as metallurgical coal, thermal energy coal, and oil and gas properties. It also engages in the mining, smelting, and refining of nickel; the provision of freight, finance, administrative, trading, marketing, and support services; and potash development activities. The company was formerly known as BHP Limited and changed its name to BHP Billiton Limited in July 2001. BHP Billiton Limited was founded in 1851 and is headquartered in Melbourne, Australia. BHP Billiton Limited is a subsidiary of BHP Billiton Group.

First Quantum Minerals Company Profile

First Quantum Minerals Ltd. engages in the exploration, development, and production of mineral properties. It primarily explores for copper, nickel, gold, and zinc ores, as well as produces acid. The company operates in seven mines and one copper smelter, including the Ravensthorpe nickel mine in Australia; the Kansanshi copper-gold mine in Zambia; the Sentinel copper operation in North Western Province of Zambia; the Guelb Moghrein copper-gold mine in Mauritania; the Çayeli copper-zinc mine in Turkey; the Las Cruces copper mine in Spain; and the Pyhäsalmi copper-zinc mine in Finland. It also has interests in copper and nickel projects at various stages of development located in Panama, Argentina, Peru, and Zambia. The company was formerly known as First Quantum Ventures Ltd. and changed its name to First Quantum Minerals Ltd. in July 1996. First Quantum Minerals Ltd. was founded in 1983 and is based in Vancouver, Canada.

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