Southern Copper Corporation (NYSE: SCCO) and Luxfer Holdings PLC (NYSE:LXFR) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Southern Copper Corporation and Luxfer Holdings PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southern Copper Corporation 16.63% 16.35% 7.38%
Luxfer Holdings PLC 3.85% 14.70% 5.12%

Valuation and Earnings

This table compares Southern Copper Corporation and Luxfer Holdings PLC’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Southern Copper Corporation $5.91 billion 5.27 $2.61 billion $1.28 31.46
Luxfer Holdings PLC $405.00 million 0.79 $48.00 million $0.58 20.38

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

Dividends

Southern Copper Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. Luxfer Holdings PLC pays an annual dividend of $0.48 per share and has a dividend yield of 4.1%. Southern Copper Corporation pays out 43.8% of its earnings in the form of a dividend. Luxfer Holdings PLC pays out 82.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Southern Copper Corporation has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Luxfer Holdings PLC has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Institutional & Insider Ownership

6.1% of Southern Copper Corporation shares are held by institutional investors. 0.5% of Southern Copper Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Southern Copper Corporation and Luxfer Holdings PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern Copper Corporation 3 3 1 0 1.71
Luxfer Holdings PLC 0 0 0 0 N/A

Southern Copper Corporation presently has a consensus target price of $35.33, suggesting a potential downside of 12.26%. Given Southern Copper Corporation’s higher possible upside, analysts clearly believe Southern Copper Corporation is more favorable than Luxfer Holdings PLC.

Summary

Southern Copper Corporation beats Luxfer Holdings PLC on 13 of the 15 factors compared between the two stocks.

Southern Copper Corporation Company Profile

Southern Copper Corporation is an integrated copper producer. It produces copper and, in the production process, obtains several by-products, including molybdenum, silver, zinc, sulfuric acid and other metals. Its segments include the Peruvian operations, the Mexican open-pit operations and the Mexican underground mining operations segment identified as the IMMSA unit. The Peruvian operations segment includes the Toquepala and Cuajone mine complexes, and the smelting and refining plants, including a metals plant industrial railroad and port facilities that service both mines. The Mexican open-pit operations segment includes the La Caridad and Buenavista mine complexes, and the smelting and refining plants, including a metals plant and a copper rod plant, and support facilities that service both mines. As of December 31, 2016, the Mexican underground mining operations segment included five underground mines that produce zinc, copper, silver and gold, a coal mine and a zinc refinery.

Luxfer Holdings PLC Company Profile

Luxfer Holdings PLC is a holding company. The Company is a materials technology company specializing in the design, manufacture and supply of materials, components and gas-containment devices for healthcare, environmental, protection and specialty end-markets. It operates through two divisions: Elektron and Gas Cylinders. Its Elektron Division focuses on specialty materials based primarily on magnesium, zirconium and rare earths. It sells its products through two brands, Magnesium Elektron and MEL Chemicals. Its Gas Cylinders Division manufactures and markets specialized products using aluminum, magnesium, carbon composites and steel. It sells its products through two brands, Luxfer Gas Cylinders and Superform. Its customers include both end users of its products and manufacturers that incorporate its products into finished goods. As of December 31, 2016, it had operated 20 manufacturing plants in the United States, the United Kingdom, Canada, France, the Czech Republic and China.

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