Head to Head Review: Hecla Mining (HL) & MDU Resources Group (MDU)

Hecla Mining (NYSE: HL) and MDU Resources Group (NYSE:MDU) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Dividends

Hecla Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. MDU Resources Group pays an annual dividend of $0.79 per share and has a dividend yield of 2.9%. Hecla Mining pays out 10.0% of its earnings in the form of a dividend. MDU Resources Group pays out 63.2% 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. MDU Resources Group has raised its dividend for 8 consecutive years. MDU Resources Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Hecla Mining and MDU Resources Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hecla Mining $577.78 million 2.65 -$23.51 million $0.10 38.20
MDU Resources Group $4.44 billion 1.20 $281.20 million $1.25 21.84

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

Profitability

This table compares Hecla Mining and MDU Resources Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hecla Mining -7.32% 1.66% 1.04%
MDU Resources Group 6.39% 10.59% 3.99%

Risk & Volatility

Hecla Mining has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, MDU Resources Group has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Hecla Mining and MDU Resources Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hecla Mining 0 2 4 0 2.67
MDU Resources Group 0 0 2 0 3.00

Hecla Mining currently has a consensus price target of $5.25, suggesting a potential upside of 37.43%. MDU Resources Group has a consensus price target of $28.75, suggesting a potential upside of 5.31%. Given Hecla Mining’s higher probable upside, equities analysts clearly believe Hecla Mining is more favorable than MDU Resources Group.

Insider and Institutional Ownership

61.1% of Hecla Mining shares are owned by institutional investors. Comparatively, 64.4% of MDU Resources Group shares are owned by institutional investors. 1.7% of Hecla Mining shares are owned by insiders. Comparatively, 1.0% of MDU Resources Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

MDU Resources Group beats Hecla Mining on 11 of the 17 factors compared between the two stocks.

Hecla Mining Company Profile

Hecla Mining Company, together with its subsidiaries, discovers, acquires, develops, and produces precious and base metal deposits worldwide. The company offers zinc, lead, and bulk flotation concentrates to custom smelters and brokers; and unrefined gold and silver bullion bars to precious metals traders. It owns 100% interests in the Greens Creek mine located on Admiralty Island, Alaska; Lucky Friday mine located in northern Idaho; Casa Berardi mine located in the Abitibi region of northwestern Quebec, Canada; and San Sebastian mine located in the state of Durango, Mexico. Hecla Mining Company was founded in 1891 and is headquartered in Coeur d'Alene, Idaho.

MDU Resources Group Company Profile

MDU Resources Group, Inc. engages in regulated energy delivery, and construction materials and services businesses in the United States. The company operates through five segments: Electric, Natural Gas Distribution, Pipeline and Midstream, Construction Materials and Contracting, and Construction Services. The Electric segment generates, transmits, and distributes electricity in Montana, North Dakota, South Dakota, and Wyoming. As of December 31, 2017, it served 142,901 residential, commercial, industrial, and municipal customers in 178 communities and adjacent rural areas. The Natural Gas Distribution segment distributes natural gas in Montana, North Dakota, South Dakota, and Wyoming, as well as Idaho, Minnesota, Oregon, and Washington; and offers related value-added services. It served approximately 938,867 residential, commercial, and industrial customers in 335 communities and adjacent rural areas. The Pipeline and Midstream segment provides natural gas transportation, underground storage, and gathering services primarily in the Rocky Mountain and northern Great Plains regions. It also provides cathodic protection and other energy-related services. The Construction Materials and Contracting segment mines, processes, and sells construction aggregates; produces and sells asphalt mix; and supplies ready-mixed concrete in the central, southern, and western United States, as well as Alaska and Hawaii. The Construction Services segment designs, constructs, and maintains overhead and underground electrical distribution and transmission lines, substations, external lighting, traffic signalization, and gas pipelines; electrical and communication wiring and infrastructure, and fire suppression systems; and renewable energy projects. It also offers utility excavation, and mechanical piping and services; and manufactures and distributes transmission line construction equipment and other supplies. The company was founded in 1924 and is based in Bismarck, North Dakota.

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