Comparing Fortuna Silver Mines (NYSE:FSM) & TRX Gold (NYSE:TRX)

TRX Gold (NYSE:TRX) and Fortuna Silver Mines (NYSE:FSM) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for TRX Gold and Fortuna Silver Mines, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TRX Gold	0	0	1	0	3.00
Fortuna Silver Mines	0	1	0	0	2.00

TRX Gold currently has a consensus target price of $1.30, indicating a potential upside of 190.89%. Fortuna Silver Mines has a consensus target price of $7.63, indicating a potential upside of 61.21%. Given TRX Gold’s stronger consensus rating and higher probable upside, analysts clearly believe TRX Gold is more favorable than Fortuna Silver Mines.

Insider & Institutional Ownership

1.1% of TRX Gold shares are held by institutional investors. Comparatively, 33.8% of Fortuna Silver Mines shares are held by institutional investors. 2.3% of TRX Gold shares are held by company insiders. Comparatively, 1.0% of Fortuna Silver Mines shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

TRX Gold has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Fortuna Silver Mines has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500.

Profitability

This table compares TRX Gold and Fortuna Silver Mines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TRX Gold	-5.86%	-3.73%	-2.66%
Fortuna Silver Mines	-5.99%	5.03%	3.34%

Valuation and Earnings

This table compares TRX Gold and Fortuna Silver Mines’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TRX Gold	$38.32 million	3.25	$2.25 million	$0.01	44.73
Fortuna Silver Mines	$842.43 million	1.72	-$50.84 million	($0.16)	-29.63

TRX Gold has higher earnings, but lower revenue than Fortuna Silver Mines. Fortuna Silver Mines is trading at a lower price-to-earnings ratio than TRX Gold, indicating that it is currently the more affordable of the two stocks.

Summary

TRX Gold beats Fortuna Silver Mines on 9 of the 14 factors compared between the two stocks.

About TRX Gold

TRX Gold Corporation engages in the exploration, development, and production of mineral property interests in the United Republic of Tanzania. The company primarily explores for gold deposits. It holds interests in the Buckreef gold project that comprises a single Special Mining License covering an area of 16.04 square kilometers and 12 Prospecting Licenses covering 98.19 square kilometers located in north-central Tanzania. The company was formerly known as Tanzanian Gold Corporation and changed its name to TRX Gold Corporation in May 2022. TRX Gold Corporation was incorporated in 1990 and is based in Oakville, Canada.

About Fortuna Silver Mines

Fortuna Silver Mines Inc. engages in the precious and base metal mining in Argentina, Burkina Faso, Mexico, Peru, and Côte d'Ivoire. It operates through Mansfield, Sanu, Sango, Cuzcatlan, Bateas, and Corporate segments. The company primarily explores for silver, lead, zinc, and gold. Its flagship project is the Séguéla gold mine, which consists of approximately 62,000 hectares and is located in the Worodougou Region of the Woroba District, Côte d'Ivoire. The company was formerly known as Fortuna Ventures Inc. and changed its name to Fortuna Silver Mines Inc. in June 2005. Fortuna Silver Mines Inc. was incorporated in 1990 and is based in Vancouver, Canada.