North American Palladium (OTCMKTS:PALDF) and Lundin Mining (OTCMKTS:LUNMF) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.

Insider & Institutional Ownership

0.3% of Lundin Mining shares are held by institutional investors. 1.0% of North American Palladium shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares North American Palladium and Lundin Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
North American Palladium 33.05% 20.31% 16.36%
Lundin Mining 9.95% 3.96% 2.72%

Volatility & Risk

North American Palladium has a beta of 2.08, indicating that its share price is 108% more volatile than the S&P 500. Comparatively, Lundin Mining has a beta of 1.99, indicating that its share price is 99% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for North American Palladium and Lundin Mining, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
North American Palladium 0 0 1 0 3.00
Lundin Mining 0 4 6 0 2.60

Dividends

North American Palladium pays an annual dividend of $0.30 per share and has a dividend yield of 2.5%. Lundin Mining pays an annual dividend of $0.09 per share and has a dividend yield of 1.7%.

Valuation and Earnings

This table compares North American Palladium and Lundin Mining’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
North American Palladium $306.17 million 2.31 $91.96 million N/A N/A
Lundin Mining $1.73 billion 2.29 $195.85 million N/A N/A

Lundin Mining has higher revenue and earnings than North American Palladium.

Summary

North American Palladium beats Lundin Mining on 8 of the 13 factors compared between the two stocks.

North American Palladium Company Profile

North American Palladium Ltd. produces precious metals in Canada. It explores for palladium, platinum, gold, nickel, copper, and other metals. It primarily holds interest in the Lac des Iles mine that is located to the northwest of Thunder Bay, Ontario. The company was founded in 1968 and is headquartered in Toronto, Canada.

Lundin Mining Company Profile

Lundin Mining Corporation, a diversified base metals mining company, engages in the exploration, development, and mining of mineral properties in Chile, the United States, Portugal, and Sweden. It primarily produces copper, zinc, and nickel, as well as gold, lead, silver, and other metals. The company holds 100% interest in the Eagle mine located in the United States; the Neves-Corvo mine located in Portugal; and the Zinkgruvan mine located in Sweden, as well as 80% interest in Candelaria and Ojos del Salado mining complex; and 24% interest the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland. The company was formerly known as South Atlantic Ventures Ltd. and changed its name to Lundin Mining Corporation in August 2004. Lundin Mining Corporation was incorporated in 1994 and is headquartered in Toronto, Canada.

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