Analyzing Ternium (NYSE:TX) and Triple Flag Precious Metals (NYSE:TFPM)

Ternium (NYSE:TX) and Triple Flag Precious Metals (NYSE:TFPM) are both mid-cap materials companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, risk, profitability, valuation, dividends and earnings.

Dividends

Ternium pays an annual dividend of $2.60 per share and has a dividend yield of 5.4%. Triple Flag Precious Metals pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. Ternium pays out 73.0% of its earnings in the form of a dividend. Triple Flag Precious Metals pays out 12.1% 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. Triple Flag Precious Metals has increased its dividend for 2 consecutive years.

Valuation & Earnings

This table compares Ternium and Triple Flag Precious Metals”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ternium	$15.61 billion	0.62	$425.23 million	$3.56	13.57
Triple Flag Precious Metals	$388.70 million	16.07	$240.01 million	$1.99	15.26

Ternium has higher revenue and earnings than Triple Flag Precious Metals. Ternium is trading at a lower price-to-earnings ratio than Triple Flag Precious Metals, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

12.0% of Ternium shares are held by institutional investors. Comparatively, 82.9% of Triple Flag Precious Metals shares are held by institutional investors. 0.0% of Ternium shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Ternium and Triple Flag Precious Metals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ternium	0	5	6	0	2.55
Triple Flag Precious Metals	0	4	5	0	2.56

Ternium presently has a consensus target price of $55.28, suggesting a potential upside of 14.41%. Triple Flag Precious Metals has a consensus target price of $39.25, suggesting a potential upside of 29.24%. Given Triple Flag Precious Metals’ stronger consensus rating and higher possible upside, analysts plainly believe Triple Flag Precious Metals is more favorable than Ternium.

Risk and Volatility

Ternium has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Triple Flag Precious Metals has a beta of -0.09, indicating that its stock price is 109% less volatile than the S&P 500.

Profitability

This table compares Ternium and Triple Flag Precious Metals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ternium	5.74%	5.82%	3.97%
Triple Flag Precious Metals	82.56%	14.01%	13.57%

Summary

Triple Flag Precious Metals beats Ternium on 10 of the 17 factors compared between the two stocks.

About Ternium

Ternium S.A., together with its subsidiaries, manufactures and distributes steel products in Mexico, Southern Region, Brazil, and internationally. It operates through three segments: Steel, Mining, and Usiminas. The Steel segment offers slabs, hot and cold rolled products, coated products, roll formed and tubular products, bars, billets, and other products. Its Mining segment sells iron ore and pellets. The Usiminas segment offers iron ore extraction, steel transformation, and production of capital goods and logistics; and manufactures and sells various products and raw materials, such as flat steel, iron ore, and stamped steel parts for the automotive industry and products for the civil construction and capital goods industry. It also provides medical and social; scrap; renewable energy; and engineering and other services, as well as operates as a distribution company. In addition, the company engages in the exploration, exploitation, and pelletizing of iron ore. Ternium S.A. was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.

About Triple Flag Precious Metals

Triple Flag Precious Metals Corp., a precious-metals-focused streaming and royalty company, engages in acquiring and managing precious metals, streams, royalties and other mineral interests in Australia, Canada, Colombia, Cote d'Ivoire, Honduras, Mexico, Mongolia, Peru, South Africa, the United States, and internationally. The company has a portfolio of streams and royalties providing exposure to gold, silver, nickel, copper, zinc, and lead. It holds a royalty interest in the Beta Hunt mine located in Pert, Wester Australia; the Camino Rojo gold and silver mine located in Mexico; the El Mochito polymetallic mine located in north-western Honduras; and La Colorada polymetallic mine located in Mexico. Triple Flag Precious Metals Corp. was founded in 2016 and is based in Toronto, Canada.