Nexa Resources (NYSE:NEXA – Get Free Report) and OR Royalties (NYSE:OR – Get Free Report) are both materials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Nexa Resources and OR Royalties, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nexa Resources | 1 | 6 | 0 | 0 | 1.86 |
| OR Royalties | 1 | 4 | 3 | 1 | 2.44 |
Nexa Resources presently has a consensus price target of $14.60, suggesting a potential upside of 13.93%. OR Royalties has a consensus price target of $40.50, suggesting a potential upside of 36.18%. Given OR Royalties’ stronger consensus rating and higher probable upside, analysts clearly believe OR Royalties is more favorable than Nexa Resources.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nexa Resources | $3.00 billion | 0.57 | $132.63 million | $1.58 | 8.11 |
| OR Royalties | $277.37 million | 20.08 | $206.09 million | $1.34 | 22.19 |
OR Royalties has lower revenue, but higher earnings than Nexa Resources. Nexa Resources is trading at a lower price-to-earnings ratio than OR Royalties, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Nexa Resources and OR Royalties’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nexa Resources | 6.44% | 16.32% | 4.07% |
| OR Royalties | 78.09% | 15.10% | 13.77% |
Dividends
Nexa Resources pays an annual dividend of $0.10 per share and has a dividend yield of 0.8%. OR Royalties pays an annual dividend of $0.25 per share and has a dividend yield of 0.8%. Nexa Resources pays out 6.3% of its earnings in the form of a dividend. OR Royalties pays out 18.7% 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. 0.6% of OR Royalties shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Risk and Volatility
Nexa Resources has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, OR Royalties has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.
Summary
OR Royalties beats Nexa Resources on 13 of the 18 factors compared between the two stocks.
About Nexa Resources
Nexa Resources S.A., together with its subsidiaries, engages in the zinc mining and smelting business worldwide. The company operates in two segments, Mining and Smelting. It produces zinc, zamac, zinc oxide, and zincal, as well as by-products, such as copper, lead, silver, gold, copper sulfate, sulfuric acid, copper cementum, silver concentrate, slag aggregates, and cadmium/sponge deposits. The company owns and operates six polymetallic mines, including three located in the Central Andes of Peru; two located in the State of Minas Gerais in Brazil; and one located in the State of Mato Grosso in Brazil. It also owns and operates three zinc smelters comprising one located in Cajamarquilla in Peru; and two located in the State of Minas Gerais in Brazil, which recovers and produces metallic zinc, zinc oxide, and by-products, such as sulfuric acid. The company also exports its products. Its products are used in civil construction, transportation, energy, agriculture, health, and consumer goods industries. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is based in Luxembourg, Luxembourg. Nexa Resources S.A. operates as a subsidiary of Votorantim S.A.
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.
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