Primero Mining (OTCMKTS:PPPMF) and First Majestic Silver (NYSE:AG) are both small-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Primero Mining and First Majestic Silver, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Primero Mining 0 1 0 0 2.00
First Majestic Silver 0 1 4 0 2.80

First Majestic Silver has a consensus target price of $8.92, suggesting a potential upside of 56.98%. Given First Majestic Silver’s stronger consensus rating and higher probable upside, analysts plainly believe First Majestic Silver is more favorable than Primero Mining.

Institutional and Insider Ownership

9.5% of Primero Mining shares are owned by institutional investors. Comparatively, 25.8% of First Majestic Silver shares are owned by institutional investors. 0.9% of First Majestic Silver shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Primero Mining and First Majestic Silver’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Primero Mining $91.77 million 0.49 -$409.68 million N/A N/A
First Majestic Silver $252.29 million 4.36 -$53.27 million ($0.04) -142.00

First Majestic Silver has higher revenue and earnings than Primero Mining.

Risk & Volatility

Primero Mining has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500. Comparatively, First Majestic Silver has a beta of 0.02, meaning that its stock price is 98% less volatile than the S&P 500.

Profitability

This table compares Primero Mining and First Majestic Silver’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Primero Mining -412.11% -10.42% -3.82%
First Majestic Silver -39.42% -4.40% -3.07%

Summary

First Majestic Silver beats Primero Mining on 11 of the 12 factors compared between the two stocks.

Primero Mining Company Profile

Primero Mining Corp. is a Canadian-based precious metals producer with mining operations in Mexico. The company focuses on building a portfolio of precious metals assets in the Americas through acquiring, exploring, developing and operating mineral resource properties. Its properties include San Dimas gold-silver Mine. The company was founded by Wade D. Nesmith on November 26, 2007 and is headquartered in Vancouver, Canada.

First Majestic Silver Company Profile

First Majestic Silver Corp. engages in the acquisition, exploration, development, and production of mineral properties with a focus on silver production in Mexico. It owns and operates six silver producing mines, including the Santa Elena Silver/Gold Mine covering an area of 101,837 hectares located in Sonora; La Encantada Silver Mine covering an area of 4,076 hectares situated in Coahuila; La Parrilla Silver Mine covering an area of 69,478 hectares located in Durango; Del Toro Silver Mine covering an area of 2,159 hectares situated in Zacatecas; San Martin Silver Mine covering an area of 38,512 hectares located in Jalisco; and La Guitarra Silver Mine that consists of 39,714 hectares situated in México State. The company was formerly known as First Majestic Resource Corp. and changed its name to First Majestic Silver Corp. in November 2006. First Majestic Silver Corp. was founded in 1979 and is headquartered in Vancouver, Canada.

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