Head-To-Head Comparison: Pan American Silver (NYSE:PAAS) & Hecla Mining (NYSE:HL)

Pan American Silver (NYSE:PAAS) and Hecla Mining (NYSE:HL) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.

Valuation & Earnings

This table compares Pan American Silver and Hecla Mining”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pan American Silver	$2.82 billion	3.64	$111.50 million	$0.87	32.58
Hecla Mining	$929.92 million	4.10	$35.80 million	$0.11	54.77

Pan American Silver has higher revenue and earnings than Hecla Mining. Pan American Silver is trading at a lower price-to-earnings ratio than Hecla Mining, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Pan American Silver and Hecla Mining, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pan American Silver	0	4	3	0	2.43
Hecla Mining	0	5	2	0	2.29

Pan American Silver presently has a consensus target price of $31.40, indicating a potential upside of 10.77%. Hecla Mining has a consensus target price of $7.07, indicating a potential upside of 17.37%. Given Hecla Mining’s higher possible upside, analysts clearly believe Hecla Mining is more favorable than Pan American Silver.

Volatility and Risk

Pan American Silver has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Hecla Mining has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.

Profitability

This table compares Pan American Silver and Hecla Mining’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pan American Silver	10.45%	9.25%	6.08%
Hecla Mining	7.13%	3.87%	2.64%

Institutional and Insider Ownership

55.4% of Pan American Silver shares are held by institutional investors. Comparatively, 63.0% of Hecla Mining shares are held by institutional investors. 12.9% of Pan American Silver shares are held by company insiders. Comparatively, 1.4% of Hecla Mining shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Pan American Silver pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Hecla Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.2%. Pan American Silver pays out 46.0% of its earnings in the form of a dividend. Hecla Mining pays out 9.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Pan American Silver has raised its dividend for 2 consecutive years. Pan American Silver is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Pan American Silver beats Hecla Mining on 11 of the 17 factors compared between the two stocks.

About Pan American Silver

Pan American Silver Corp. engages in the exploration, mine development, extraction, processing, refining, and reclamation of silver, gold, zinc, lead, and copper mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil. The company was formerly known as Pan American Minerals Corp. and changed its name to Pan American Silver Corp. in April 1995. Pan American Silver Corp. was incorporated in 1979 and is headquartered in Vancouver, Canada.

About Hecla Mining

Hecla Mining Company, together with its subsidiaries, provides precious and base metal properties in the United States, Canada, Japan, Korea, and China. The company mines for silver, gold, lead, and zinc concentrates, as well as carbon material containing silver and gold for custom smelters, metal traders, and third-party processors; and doré containing silver and gold. It flagship project is the Greens Creek mine located on Admiralty Island in southeast Alaska. Hecla Mining Company was incorporated in 1891 and is headquartered in Coeur d'Alene, Idaho.