Head-To-Head Review: OR Royalties (NYSE:OR) & HudBay Minerals (NYSE:HBM)

OR Royalties (NYSE:OR) and HudBay Minerals (NYSE:HBM) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Dividends

OR Royalties pays an annual dividend of $0.22 per share and has a dividend yield of 0.7%. HudBay Minerals pays an annual dividend of $0.03 per share and has a dividend yield of 0.1%. OR Royalties pays out 16.4% of its earnings in the form of a dividend. HudBay Minerals pays out 1.8% 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. OR Royalties has increased its dividend for 1 consecutive years. OR Royalties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

68.5% of OR Royalties shares are held by institutional investors. Comparatively, 57.8% of HudBay Minerals shares are held by institutional investors. 0.6% of OR Royalties shares are held by insiders. Comparatively, 0.3% of HudBay Minerals shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares OR Royalties and HudBay Minerals”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OR Royalties	$277.37 million	22.87	$206.09 million	$1.34	25.24
HudBay Minerals	$2.21 billion	4.99	$568.50 million	$1.66	16.74

HudBay Minerals has higher revenue and earnings than OR Royalties. HudBay Minerals is trading at a lower price-to-earnings ratio than OR Royalties, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for OR Royalties and HudBay Minerals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OR Royalties	0	4	5	1	2.70
HudBay Minerals	0	2	10	2	3.00

OR Royalties currently has a consensus price target of $46.50, suggesting a potential upside of 37.46%. HudBay Minerals has a consensus price target of $27.33, suggesting a potential downside of 1.65%. Given OR Royalties’ higher possible upside, equities analysts clearly believe OR Royalties is more favorable than HudBay Minerals.

Risk and Volatility

OR Royalties has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, HudBay Minerals has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Profitability

This table compares OR Royalties and HudBay Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OR Royalties	78.09%	15.10%	13.77%
HudBay Minerals	27.75%	10.04%	5.36%

Summary

OR Royalties beats HudBay Minerals on 10 of the 18 factors compared between the two stocks.

About OR Royalties

Osisko Gold Royalties Ltd acquires and manages precious metal and other royalties, streams, and other interests in Canada and internationally. It also owns options on offtake; royalty/stream financings; and exclusive rights to participate in future royalty/stream financings on various projects. The company’s primary asset is a 3-5% net smelter return royalty on the Canadian Malartic complex located in Canada. In addition, it is involved in the exploration, evaluation, and development of mining projects. It primarily explores for precious metals, including gold, silver, diamond, and others. Osisko Gold Royalties Ltd was founded in 2014 and is headquartered in Montreal, Canada.

About HudBay Minerals

Hudbay Minerals Inc., a diversified mining company, focuses on the exploration, development, operation, and optimization of properties in North and South America. It produces copper concentrates containing gold, silver, and molybdenum; gold concentrates containing zinc; zinc concentrates; molybdenum concentrates; and silver/gold doré. The company's flagship project is the 100% owned Constancia mine located in the Province of Chumbivilcas in southern Peru. Hudbay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.