Freeport-McMoRan (NYSE:FCX) and Searchlight Minerals (OTCMKTS:SRCH) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.
Institutional & Insider Ownership
72.0% of Freeport-McMoRan shares are held by institutional investors. 1.0% of Freeport-McMoRan 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.
This table compares Freeport-McMoRan and Searchlight Minerals’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Freeport-McMoRan||$18.63 billion||0.77||$2.60 billion||$1.52||6.51|
Freeport-McMoRan has higher revenue and earnings than Searchlight Minerals.
This is a summary of recent ratings and price targets for Freeport-McMoRan and Searchlight Minerals, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Freeport-McMoRan currently has a consensus target price of $13.79, indicating a potential upside of 39.45%. Given Freeport-McMoRan’s higher probable upside, equities research analysts plainly believe Freeport-McMoRan is more favorable than Searchlight Minerals.
Volatility and Risk
Freeport-McMoRan has a beta of 2.34, suggesting that its stock price is 134% more volatile than the S&P 500. Comparatively, Searchlight Minerals has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.
This table compares Freeport-McMoRan and Searchlight Minerals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Freeport-McMoRan pays an annual dividend of $0.20 per share and has a dividend yield of 2.0%. Searchlight Minerals does not pay a dividend. Freeport-McMoRan pays out 13.2% of its earnings in the form of a dividend.
Freeport-McMoRan beats Searchlight Minerals on 10 of the 11 factors compared between the two stocks.
Freeport-McMoRan, Inc. engages in the mining of copper, gold, and molybdenum. It operates through the following segments: North America Copper Mines; South America Mining; Indonesia Mining; Molybdenum Mines; Rod and Refining; Atlantic Copper Smelting and Refining; and Corporate, Other, and Eliminations. The North America Copper Mines segment operates open-pit copper mines in Morenci, Bagdad, Safford, Sierrita and Miami in Arizona; and Chino and Tyrone in New Mexico. The South America Mining segment includes Cerro Verde in Peru and El Abra in Chile. The Indonesia Mining segment handles the operations of Grasberg minerals district that produces copper concentrate that contains significant quantities of gold and silver. The Molybdenum Mines segment includes the Henderson underground mine and Climax open-pit mine, both in Colorado. The Rod and Refining segment consists of copper conversion facilities located in North America, and includes a refinery, rod mills, and a specialty copper products facility. The Atlantic Copper Smelting and Refining segment smelts and refines copper concentrate and markets refined copper and precious metals in slimes. The Corporate, Other, and Eliminations segment consists of other mining and eliminations, oil and gas operations, and other corporate and elimination items. The company was founded by James R. Moffett on November 10, 1987 and is headquartered in Phoenix, AZ.
About Searchlight Minerals
Searchlight Minerals Corp., an exploration stage company, engages in a slag reprocessing project; and the acquisition and exploration of mineral properties in the United States. The company holds interests in the Clarkdale slag project, located in Clarkdale, Arizona, which is a reclamation project to recover precious and base metals from the reprocessing of slag produced from the smelting of copper ore mined at the United Verde Copper Mine in Jerome, Arizona. It also rents land to Clarkdale Arizona Central Railroad. The company was formerly known as Phage Genomics, Inc and changed its name to Searchlight Minerals Corp. in June 2005. Searchlight Minerals Corp. was founded in 1999 and is headquartered in Henderson, Nevada.
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