Head to Head Review: Nexa Resources (NYSE:NEXA) versus OR Royalties (NYSE:OR)

OR Royalties (NYSE:OR) and Nexa Resources (NYSE:NEXA) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Dividends

OR Royalties pays an annual dividend of $0.25 per share and has a dividend yield of 0.9%. Nexa Resources pays an annual dividend of $0.10 per share and has a dividend yield of 0.8%. OR Royalties pays out 18.7% of its earnings in the form of a dividend. Nexa Resources pays out 6.3% 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.

Earnings & Valuation

This table compares OR Royalties and Nexa Resources”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	19.70	$206.09 million	$1.34	21.77
Nexa Resources	$3.00 billion	0.57	$132.63 million	$1.58	8.14

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

Insider & Institutional Ownership

68.5% of OR Royalties shares are held 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.

Analyst Ratings

This is a summary of current recommendations for OR Royalties and Nexa Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OR Royalties	1	4	3	1	2.44
Nexa Resources	1	6	0	0	1.86

OR Royalties currently has a consensus target price of $40.50, suggesting a potential upside of 38.82%. Nexa Resources has a consensus target price of $14.60, suggesting a potential upside of 13.49%. Given OR Royalties’ stronger consensus rating and higher probable upside, analysts plainly believe OR Royalties is more favorable than Nexa Resources.

Profitability

This table compares OR Royalties and Nexa Resources’ 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%
Nexa Resources	6.44%	16.32%	4.07%

Volatility and Risk

OR Royalties has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Nexa Resources has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Summary

OR Royalties beats Nexa Resources on 12 of the 17 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 Nexa Resources

Nexa Resources S.A., together with its subsidiaries, engages in the zinc mining and smelting business worldwide. The company operates in two segments, Mining and Smelting. It produces zinc, zamac, zinc oxide, and zincal, as well as by-products, such as copper, lead, silver, gold, copper sulfate, sulfuric acid, copper cementum, silver concentrate, slag aggregates, and cadmium/sponge deposits. The company owns and operates six polymetallic mines, including three located in the Central Andes of Peru; two located in the State of Minas Gerais in Brazil; and one located in the State of Mato Grosso in Brazil. It also owns and operates three zinc smelters comprising one located in Cajamarquilla in Peru; and two located in the State of Minas Gerais in Brazil, which recovers and produces metallic zinc, zinc oxide, and by-products, such as sulfuric acid. The company also exports its products. Its products are used in civil construction, transportation, energy, agriculture, health, and consumer goods industries. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is based in Luxembourg, Luxembourg. Nexa Resources S.A. operates as a subsidiary of Votorantim S.A.