Reviewing ThyssenKrupp (OTCMKTS:TKAMY) and Southern Copper (NYSE:SCCO)

Southern Copper (NYSE:SCCO) and ThyssenKrupp (OTCMKTS:TKAMY) are both large-cap materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Valuation and Earnings

This table compares Southern Copper and ThyssenKrupp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Copper	$13.42 billion	12.30	$4.33 billion	$6.84	28.93
ThyssenKrupp	$36.31 billion	0.29	$514.57 million	$0.54	31.41

Southern Copper has higher earnings, but lower revenue than ThyssenKrupp. Southern Copper is trading at a lower price-to-earnings ratio than ThyssenKrupp, indicating that it is currently the more affordable of the two stocks.

Dividends

Southern Copper pays an annual dividend of $4.40 per share and has a dividend yield of 2.2%. ThyssenKrupp pays an annual dividend of $0.11 per share and has a dividend yield of 0.6%. Southern Copper pays out 64.3% of its earnings in the form of a dividend. ThyssenKrupp pays out 20.4% 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.

Volatility and Risk

Southern Copper has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, ThyssenKrupp has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Institutional and Insider Ownership

7.9% of Southern Copper shares are owned by institutional investors. 0.1% of Southern Copper 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.

Profitability

This table compares Southern Copper and ThyssenKrupp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern Copper	35.87%	49.04%	25.81%
ThyssenKrupp	0.89%	5.94%	2.17%

Analyst Recommendations

This is a breakdown of recent ratings for Southern Copper and ThyssenKrupp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Copper	7	5	3	0	1.73
ThyssenKrupp	2	2	3	1	2.38

Southern Copper currently has a consensus target price of $146.84, indicating a potential downside of 25.80%. Given Southern Copper’s higher probable upside, analysts plainly believe Southern Copper is more favorable than ThyssenKrupp.

Summary

Southern Copper beats ThyssenKrupp on 10 of the 16 factors compared between the two stocks.

About Southern Copper

Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc, copper, molybdenum, silver, gold, and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant in Mexico. The company also operates Buenavista, an open-pit copper mine, as well as two copper concentrators and two operating SX-EW plants in Mexico. In addition, it operates underground mines that produce zinc, lead, copper, silver, and gold; a coal mine; and a zinc refinery. The company has interests in 156,818 hectares and 502,688 hectares of concessions in Peru and Mexico; and 168,200 hectares and 28,453 hectares of exploration concessions in Argentina and Chile. Southern Copper Corporation was incorporated in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation is a subsidiary of Americas Mining Corporation.

About ThyssenKrupp

thyssenkrupp AG operates as an industrial and technology company in Germany and internationally. It operates through five segments: Automotive Technology, Decarbon Technologies, Materials Services, Steel Europe, and Marine Systems. The Automotive Technology segment offers components, systems, and automation solutions for vehicle manufacturing, such as axle assembly, body in white, camshafts and electric engine components, dampers, dies, springs and stabilizers, crankshafts and conrods, steering, and undercarriages. The Decarbon Technologies segment provides slewing bearings and rings, green ammonia and methanol, chemical and cement plants, high pressure processing, and refinery services, as well as green hydrogen. The Marine System segment manufactures submarines, naval services, and naval surface vessels. The Material Services segment offers 3D-printing/additive manufacturing, alloys, infrastructure project and services, industrial minerals, logistics services, metals, nonferrous metals, plastics, rolled steel, special ores, and stainless steel. The Steel Europe segment manufactures composite materials, electrical steel, hot strips, organic coated strips and sheet, packaging steel, precision steel strip, and sheet and coated products. thyssenkrupp AG was founded in 1811 and is headquartered in Essen, Germany.