Analyzing Nexa Resources (NYSE:NEXA) & Wheaton Precious Metals (NYSE:WPM)

Wheaton Precious Metals (NYSE:WPM) and Nexa Resources (NYSE:NEXA) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Insider & Institutional Ownership

70.3% of Wheaton Precious Metals shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Wheaton Precious Metals and Nexa Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wheaton Precious Metals	54.72%	13.32%	12.89%
Nexa Resources	-0.57%	-8.80%	-2.08%

Earnings & Valuation

This table compares Wheaton Precious Metals and Nexa Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wheaton Precious Metals	$1.28 billion	51.60	$529.14 million	$2.20	66.36
Nexa Resources	$2.77 billion	N/A	-$205.03 million	($0.12)	-99.04

Wheaton Precious Metals has higher earnings, but lower revenue than Nexa Resources. Nexa Resources is trading at a lower price-to-earnings ratio than Wheaton Precious Metals, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Wheaton Precious Metals and Nexa Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wheaton Precious Metals	0	1	10	1	3.00
Nexa Resources	2	6	0	0	1.75

Wheaton Precious Metals presently has a consensus price target of $140.44, suggesting a potential downside of 3.80%. Nexa Resources has a consensus price target of $7.74, suggesting a potential downside of 34.85%. Given Wheaton Precious Metals’ stronger consensus rating and higher possible upside, research analysts plainly believe Wheaton Precious Metals is more favorable than Nexa Resources.

Dividends

Wheaton Precious Metals pays an annual dividend of $0.66 per share and has a dividend yield of 0.5%. Nexa Resources pays an annual dividend of $0.10 per share and has a dividend yield of 0.8%. Wheaton Precious Metals pays out 30.0% of its earnings in the form of a dividend. Nexa Resources pays out -83.3% 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. Wheaton Precious Metals has increased its dividend for 2 consecutive years. Nexa Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Wheaton Precious Metals has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Nexa Resources has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Summary

Wheaton Precious Metals beats Nexa Resources on 12 of the 16 factors compared between the two stocks.

About Wheaton Precious Metals

Wheaton Precious Metals Corp. primarily sells precious metals in North America, Europe, and South America. It produces and sells gold, silver, palladium, and cobalt deposits. The company was formerly known as Silver Wheaton Corp. and changed its name to Wheaton Precious Metals Corp. in May 2017. Wheaton Precious Metals Corp. was founded in 2004 and is headquartered in Vancouver, Canada.

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.