Freeport-McMoran (NYSE: FCX) and Turquoise Hill Resources (NYSE:IVN) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

68.0% of Freeport-McMoran shares are held by institutional investors. 1.4% of Freeport-McMoran shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Freeport-McMoran and Turquoise Hill Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Freeport-McMoran 3 11 3 0 2.00
Turquoise Hill Resources 0 0 0 0 N/A

Freeport-McMoran presently has a consensus target price of $14.71, indicating a potential upside of 3.32%. Given Freeport-McMoran’s higher possible upside, analysts clearly believe Freeport-McMoran is more favorable than Turquoise Hill Resources.

Profitability

This table compares Freeport-McMoran and Turquoise Hill Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Freeport-McMoran 5.97% 10.45% 2.60%
Turquoise Hill Resources -0.19% 1.09% -0.01%

Earnings and Valuation

This table compares Freeport-McMoran and Turquoise Hill Resources’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Freeport-McMoran $15.31 billion 1.35 $5.20 billion $0.71 20.06
Turquoise Hill Resources N/A N/A N/A N/A N/A

Freeport-McMoran has higher revenue and earnings than Turquoise Hill Resources.

Summary

Freeport-McMoran beats Turquoise Hill Resources on 8 of the 8 factors compared between the two stocks.

About Freeport-McMoran

Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.

About Turquoise Hill Resources

Turquoise Hill Resources Ltd. is an international mining company. The Company focuses on the operation and further development of the Oyu Tolgoi copper-gold mine in Southern Mongolia, which is the Company’s principal material mineral resource property. The Company’s Oyu Tolgoi mine is held through approximately 65% interest in Oyu Tolgoi LLC (Oyu Tolgoi) and the remaining approximately 35% interest is held by Erdenes Oyu Tolgoi LLC (Erdenes). The Company’s Oyu Tolgoi mine is located approximately 550 kilometers south of Ulaanbaatar, Mongolia’s capital city, and 80 kilometers north of the Mongolia-China border. The Company’s Mineralization on the property consists of porphyry-style copper, gold, silver and molybdenum contained in a linear structural trend (the Oyu Tolgoi Trend) of deposits throughout this trend. They include, from south to north, the Heruga Deposit, the Oyut deposit and the Hugo Dummett deposits (Hugo South, Hugo North and Hugo North Extension).

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