Critical Analysis: Fresnillo (OTCMKTS:FNLPF) and Wheaton Precious Metals (NYSE:WPM)

Wheaton Precious Metals (NYSE:WPM) and Fresnillo (OTCMKTS:FNLPF) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

Wheaton Precious Metals pays an annual dividend of $0.66 per share and has a dividend yield of 0.9%. Fresnillo pays an annual dividend of $0.52 per share and has a dividend yield of 4.3%. Wheaton Precious Metals pays out 56.9% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Wheaton Precious Metals and Fresnillo”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wheaton Precious Metals	$1.28 billion	27.14	$537.64 million	$1.16	66.26
Fresnillo	$2.71 billion	3.30	$233.91 million	N/A	N/A

Wheaton Precious Metals has higher earnings, but lower revenue than Fresnillo.

Profitability

This table compares Wheaton Precious Metals and Fresnillo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wheaton Precious Metals	50.05%	8.85%	8.74%
Fresnillo	N/A	N/A	N/A

Risk and Volatility

Wheaton Precious Metals has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Fresnillo has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Wheaton Precious Metals and Fresnillo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wheaton Precious Metals	0	0	9	1	3.10
Fresnillo	0	1	0	2	3.33

Wheaton Precious Metals currently has a consensus price target of $72.44, indicating a potential downside of 5.75%. Given Wheaton Precious Metals’ higher probable upside, equities research analysts plainly believe Wheaton Precious Metals is more favorable than Fresnillo.

Institutional and Insider Ownership

70.3% of Wheaton Precious Metals shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Wheaton Precious Metals beats Fresnillo on 9 of the 14 factors compared between the two stocks.

About Wheaton Precious Metals

Wheaton Precious Metals Corp. primarily sells precious metals in North America, Europe, and South America. It produces and sells gold, silver, palladium, and cobalt deposits. The company was formerly known as Silver Wheaton Corp. and changed its name to Wheaton Precious Metals Corp. in May 2017. Wheaton Precious Metals Corp. was founded in 2004 and is headquartered in Vancouver, Canada.

About Fresnillo

Fresnillo plc mines, develops, and produces non-ferrous minerals in Mexico. It operates through seven segments: Fresnillo, Saucito, Ciénega, Herradura, Noche Buena, San Julián, and Juanicipio. The company primarily explores for silver, gold, lead, and zinc concentrates. Its projects include the Fresnillo silver mine located in the state of Zacatecas; Saucito silver mine situated in the state of Zacatecas; Ciénega gold mine located in the state of Durango; Herradura gold mine situated in the state of Sonora; Noche Buena gold mine located in the state of Sonora; San Julián silver-gold mine situated on the border of Chihuahua/Durango states; and Juanicipio mine located in the state of Zacatecas. It also leases mining equipment; produces gold/silver doré bars; and provides administrative services. The company was founded in 1887 and is headquartered in Mexico City, Mexico. Fresnillo plc operates as a subsidiary of Industrias Peñoles, S.A.B. de C.V.