Contrasting Teck Resources (TECK) and BHP Billiton Limited (BHP)

Teck Resources (NYSE: TECK) and BHP Billiton Limited (NYSE:BHP) are both large-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Valuation and Earnings

This table compares Teck Resources and BHP Billiton Limited’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Teck Resources $6.97 billion 1.76 $785.40 million C$3.16 6.81
BHP Billiton Limited $38.29 billion 1.79 $5.89 billion N/A N/A

BHP Billiton Limited has higher revenue and earnings than Teck Resources.

Dividends

Teck Resources pays an annual dividend of C$0.08 per share and has a dividend yield of 0.4%. BHP Billiton Limited pays an annual dividend of $1.72 per share and has a dividend yield of 4.0%. Teck Resources pays out 2.5% of its earnings in the form of a dividend.

Profitability

This table compares Teck Resources and BHP Billiton Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Teck Resources 19.72% 15.16% 7.92%
BHP Billiton Limited N/A N/A N/A

Volatility and Risk

Teck Resources has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, BHP Billiton Limited has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Teck Resources and BHP Billiton Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teck Resources 1 0 19 0 2.90
BHP Billiton Limited 5 5 5 0 2.00

Teck Resources currently has a consensus target price of C$31.77, indicating a potential upside of 47.57%. BHP Billiton Limited has a consensus target price of $34.61, indicating a potential downside of 19.10%. Given Teck Resources’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Teck Resources is more favorable than BHP Billiton Limited.

Insider and Institutional Ownership

47.1% of Teck Resources shares are owned by institutional investors. Comparatively, 2.8% of BHP Billiton Limited shares are owned by institutional investors. 0.0% of BHP Billiton Limited shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Teck Resources beats BHP Billiton Limited on 8 of the 14 factors compared between the two stocks.

Teck Resources Company Profile

Teck Resources Ltd is engaged in the business of exploring for, acquiring, developing and producing natural resources. The Company’s activities are organized into business units that are focused on steelmaking coal, copper, zinc and energy. It operates in five segments: steelmaking coal, copper, zinc, energy and corporate. The corporate segment includes all of its activities in commodities other than copper, coal, zinc and energy. Through its interests in mining and processing operations in Canada, the United States, Chile and Peru, the Company is a seaborne exporter of steelmaking coal, and producer of copper and mined zinc. It also produces lead, molybdenum, silver, and various specialty and other metals, chemicals and fertilizers. In addition, the Company owns interest in the Fort Hills oil sands project and interests in other assets in the Athabasca region of Alberta. It is engaged in advancing porphyry copper projects in Canada, Chile, Peru, the United States and Turkey.

BHP Billiton Limited Company Profile

BHP Billiton Limited is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. The Company extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. The Company manages product distribution through its global logistics chain, including freight and pipeline transportation. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing.

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