Comparing Ivanhoe Mines (OTCMKTS:IVPAF) & Southern Copper (NYSE:SCCO)

Southern Copper (NYSE:SCCO) and Ivanhoe Mines (OTCMKTS:IVPAF) are both large-cap materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Profitability

This table compares Southern Copper and Ivanhoe Mines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern Copper	35.87%	49.04%	25.81%
Ivanhoe Mines	23.47%	5.07%	3.81%

Insider and Institutional Ownership

7.9% of Southern Copper shares are owned by institutional investors. 0.1% of Southern Copper shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Southern Copper has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Ivanhoe Mines has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Southern Copper and Ivanhoe Mines, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Copper	7	5	3	0	1.73
Ivanhoe Mines	0	4	2	1	2.57

Southern Copper currently has a consensus target price of $146.84, indicating a potential downside of 28.62%. Ivanhoe Mines has a consensus target price of $15.20, indicating a potential upside of 77.16%. Given Ivanhoe Mines’ stronger consensus rating and higher possible upside, analysts plainly believe Ivanhoe Mines is more favorable than Southern Copper.

Earnings and Valuation

This table compares Southern Copper and Ivanhoe Mines”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Copper	$13.42 billion	12.79	$4.33 billion	$6.84	30.08
Ivanhoe Mines	$441.61 million	27.71	$261.55 million	$0.09	95.33

Southern Copper has higher revenue and earnings than Ivanhoe Mines. Southern Copper is trading at a lower price-to-earnings ratio than Ivanhoe Mines, indicating that it is currently the more affordable of the two stocks.

Summary

Southern Copper beats Ivanhoe Mines on 10 of the 15 factors compared between the two stocks.

About Southern Copper

Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc, copper, molybdenum, silver, gold, and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant in Mexico. The company also operates Buenavista, an open-pit copper mine, as well as two copper concentrators and two operating SX-EW plants in Mexico. In addition, it operates underground mines that produce zinc, lead, copper, silver, and gold; a coal mine; and a zinc refinery. The company has interests in 156,818 hectares and 502,688 hectares of concessions in Peru and Mexico; and 168,200 hectares and 28,453 hectares of exploration concessions in Argentina and Chile. Southern Copper Corporation was incorporated in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation is a subsidiary of Americas Mining Corporation.

About Ivanhoe Mines

Ivanhoe Mines Ltd. engages in the mining, development, and exploration of minerals and precious metals primarily in Africa. It explores for platinum, palladium, nickel, copper, gold, rhodium, zinc, silver, germanium, and lead deposits. The company's projects include the Platreef project located in the Northern Limb of South Africa's Bushveld Complex; the Kipushi project located in Haut-Katanga Province, Democratic Republic of Congo; and the Kamoa-Kakula project located within the Central African Copperbelt. It also holds a 100% interest in the Western Foreland exploration project covering an area of approximately 2,407 square kilometers located in the Democratic Republic of Congo. The company was formerly known as Ivanplats Limited and changed its name to Ivanhoe Mines Ltd. in August 2013. The company was incorporated in 1993 and is based in Vancouver, Canada.