Contrasting First Quantum Minerals (OTCMKTS:FQVLF) & Freeport-McMoRan (NYSE:FCX)

Freeport-McMoRan (NYSE:FCX) and First Quantum Minerals (OTCMKTS:FQVLF) are both large-cap materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Dividends

Freeport-McMoRan pays an annual dividend of $0.30 per share and has a dividend yield of 0.5%. First Quantum Minerals pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Freeport-McMoRan pays out 12.6% of its earnings in the form of a dividend. First Quantum Minerals pays out 30.0% 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. Freeport-McMoRan is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Freeport-McMoRan and First Quantum Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freeport-McMoRan	13.03%	12.09%	6.50%
First Quantum Minerals	2.65%	-0.03%	-0.02%

Valuation and Earnings

This table compares Freeport-McMoRan and First Quantum Minerals”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freeport-McMoRan	$25.91 billion	3.29	$2.20 billion	$2.38	24.94
First Quantum Minerals	$5.24 billion	3.69	-$28.00 million	$0.20	115.95

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

Risk and Volatility

Freeport-McMoRan has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, First Quantum Minerals has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Freeport-McMoRan and First Quantum Minerals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freeport-McMoRan	0	4	20	1	2.88
First Quantum Minerals	0	2	6	1	2.89

Freeport-McMoRan presently has a consensus price target of $75.30, indicating a potential upside of 26.85%. Given Freeport-McMoRan’s higher possible upside, research analysts clearly believe Freeport-McMoRan is more favorable than First Quantum Minerals.

Institutional & Insider Ownership

80.8% of Freeport-McMoRan shares are held by institutional investors. 0.7% of Freeport-McMoRan shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Freeport-McMoRan beats First Quantum Minerals on 13 of the 16 factors compared between the two stocks.

About Freeport-McMoRan

Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. It primarily explores for copper, gold, molybdenum, silver, and other metals. The company's assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Chino and Tyrone in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile. The company was formerly known as Freeport-McMoRan Copper & Gold Inc. and changed its name to Freeport-McMoRan Inc. in July 2014. Freeport-McMoRan Inc. was incorporated in 1987 and is headquartered in Phoenix, Arizona.

About First Quantum Minerals

First Quantum Minerals Ltd., together with its subsidiaries, engages in the exploration, development, and production of mineral properties. It primarily explores for copper, nickel, pyrite, silver, gold, and zinc ores, as well as produces acid. The company has operating mines located in Zambia, Panama, Finland, Turkey, Spain, Australia, and Mauritania, as well as a development project in Zambia. It is exploring the Taca Taca copper-gold-molybdenum project in Argentina, as well as the Haquira copper deposit in Peru. The company was formerly known as First Quantum Ventures Ltd. and changed its name to First Quantum Minerals Ltd. in July 1996. The company is based in Vancouver, Canada.