Comparing FAT Brands (NASDAQ:FATBB) & Southern Copper (NYSE:SCCO)

FAT Brands (NASDAQ:FATBB) and Southern Copper (NYSE:SCCO) are both materials companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Analyst Ratings

This is a summary of current ratings and price targets for FAT Brands and Southern Copper, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FAT Brands	1	0	0	0	1.00
Southern Copper	7	5	2	0	1.64

Southern Copper has a consensus target price of $156.02, suggesting a potential downside of 22.19%. Given Southern Copper’s stronger consensus rating and higher possible upside, analysts plainly believe Southern Copper is more favorable than FAT Brands.

Insider & Institutional Ownership

7.9% of Southern Copper shares are owned by institutional investors. 59.9% of FAT Brands shares are owned by insiders. Comparatively, 0.1% of Southern Copper shares are owned 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.

Dividends

FAT Brands pays an annual dividend of $0.14 per share and has a dividend yield of 15.8%. Southern Copper pays an annual dividend of $4.40 per share and has a dividend yield of 2.2%. FAT Brands pays out -1.0% of its earnings in the form of a dividend. Southern Copper pays out 64.3% 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. FAT Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares FAT Brands and Southern Copper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FAT Brands	-39.33%	N/A	-17.57%
Southern Copper	35.87%	49.04%	25.81%

Risk and Volatility

FAT Brands has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Southern Copper has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Valuation and Earnings

This table compares FAT Brands and Southern Copper”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FAT Brands	$574.14 million	0.03	-$189.85 million	($13.35)	-0.07
Southern Copper	$13.42 billion	12.47	$4.33 billion	$6.84	29.31

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

Summary

Southern Copper beats FAT Brands on 13 of the 16 factors compared between the two stocks.

About FAT Brands

FAT Brands Inc., a multi-brand restaurant franchising company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse/Bonanza Steakhouse, Native Grill & Wings, Smokey Bones, and Twin Peaks. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Holdings, LLC.

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.