Financial Analysis: First Quantum Minerals (OTCMKTS:FQVLF) & Freeport-McMoRan (NYSE:FCX)

Freeport-McMoRan (NYSE:FCX) and First Quantum Minerals (OTCMKTS:FQVLF) are both large-cap materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Profitability

This table compares Freeport-McMoRan and First Quantum Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freeport-McMoRan	13.03%	12.09%	6.50%
First Quantum Minerals	2.65%	-0.03%	-0.02%

Valuation & Earnings

This table compares Freeport-McMoRan and First Quantum Minerals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freeport-McMoRan	$25.91 billion	3.46	$2.20 billion	$2.38	26.24
First Quantum Minerals	$5.24 billion	3.72	-$28.00 million	$0.20	116.70

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

Analyst Ratings

This is a summary of current recommendations and price targets for Freeport-McMoRan and First Quantum Minerals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freeport-McMoRan	0	4	20	1	2.88
First Quantum Minerals	1	1	6	1	2.78

Freeport-McMoRan currently has a consensus target price of $75.67, suggesting a potential upside of 21.19%. Given Freeport-McMoRan’s stronger consensus rating and higher probable upside, equities analysts plainly believe Freeport-McMoRan is more favorable than First Quantum Minerals.

Volatility and Risk

Freeport-McMoRan has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, First Quantum Minerals has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Institutional and Insider Ownership

80.8% of Freeport-McMoRan shares are owned by institutional investors. 0.7% of Freeport-McMoRan shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Freeport-McMoRan beats First Quantum Minerals on 11 of the 14 factors compared between the two stocks.

About Freeport-McMoRan

Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. It primarily explores for copper, gold, molybdenum, silver, and other metals. The company's assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Chino and Tyrone in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile. The company was formerly known as Freeport-McMoRan Copper & Gold Inc. and changed its name to Freeport-McMoRan Inc. in July 2014. Freeport-McMoRan Inc. was incorporated in 1987 and is headquartered in Phoenix, Arizona.

About First Quantum Minerals

First Quantum Minerals Ltd., together with its subsidiaries, engages in the exploration, development, and production of mineral properties. It primarily explores for copper, nickel, pyrite, silver, gold, and zinc ores, as well as produces acid. The company has operating mines located in Zambia, Panama, Finland, Turkey, Spain, Australia, and Mauritania, as well as a development project in Zambia. It is exploring the Taca Taca copper-gold-molybdenum project in Argentina, as well as the Haquira copper deposit in Peru. The company was formerly known as First Quantum Ventures Ltd. and changed its name to First Quantum Minerals Ltd. in July 1996. The company is based in Vancouver, Canada.