Analyzing Nexa Resources (NEXA) and Teck Resources (TECK)

Nexa Resources (NYSE: NEXA) and Teck Resources (NYSE:TECK) are both mid-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Nexa Resources and Teck Resources, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nexa Resources 0 0 4 0 3.00
Teck Resources 1 0 18 0 2.89

Nexa Resources currently has a consensus price target of $21.15, suggesting a potential upside of 27.18%. Teck Resources has a consensus price target of $31.39, suggesting a potential upside of 33.68%. Given Teck Resources’ higher probable upside, analysts plainly believe Teck Resources is more favorable than Nexa Resources.

Insider and Institutional Ownership

46.2% of Teck Resources shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Teck Resources pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Nexa Resources does not pay a dividend. Teck Resources pays out 2.5% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Nexa Resources and Teck Resources’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Nexa Resources N/A N/A N/A $0.51 32.61
Teck Resources $6.97 billion 1.92 $785.40 million $3.16 7.43

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

Profitability

This table compares Nexa Resources and Teck Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nexa Resources N/A N/A N/A
Teck Resources 19.72% 15.16% 7.92%

Summary

Teck Resources beats Nexa Resources on 9 of the 11 factors compared between the two stocks.

Nexa Resources Company Profile

Nexa Resources SA, formerly VM Holding SA, is a Luxembourg-based company engaged in the mineral resources industry. The Company is a metals and mining entity mainly engaged in zinc content production, and whose product portfolio also includes copper, lead, silver and gold. Its mining and smelting presence is located in Brazil, conducted by Votorantim Metais Zinco SA, and in Peru, conducted by Compania Minera Milpo SAA, and Votorantim Metais-Cajamarquilla SA. Its controlling shareholder is Votorantim SA, a Brazilian privately owned industrial conglomerate that holds ownership interests in metal, steel, cement, energy and pulp companies, among others.

Teck Resources Company Profile

Teck Resources Ltd is engaged in the business of exploring for, acquiring, developing and producing natural resources. The Company’s activities are organized into business units that are focused on steelmaking coal, copper, zinc and energy. It operates in five segments: steelmaking coal, copper, zinc, energy and corporate. The corporate segment includes all of its activities in commodities other than copper, coal, zinc and energy. Through its interests in mining and processing operations in Canada, the United States, Chile and Peru, the Company is a seaborne exporter of steelmaking coal, and producer of copper and mined zinc. It also produces lead, molybdenum, silver, and various specialty and other metals, chemicals and fertilizers. In addition, the Company owns interest in the Fort Hills oil sands project and interests in other assets in the Athabasca region of Alberta. It is engaged in advancing porphyry copper projects in Canada, Chile, Peru, the United States and Turkey.

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