Financial Analysis: Mountain Province Diamonds (OTCMKTS:MPVDF) vs. McEwen (NYSE:MUX)

Mountain Province Diamonds (OTCMKTS:MPVDF) and McEwen (NYSE:MUX) are both small-cap basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Earnings & Valuation

This table compares Mountain Province Diamonds and McEwen”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mountain Province Diamonds	$195.36 million	0.02	-$58.99 million	($0.69)	-0.03
McEwen	$197.55 million	5.52	$34.43 million	$1.18	15.48

McEwen has higher revenue and earnings than Mountain Province Diamonds. Mountain Province Diamonds is trading at a lower price-to-earnings ratio than McEwen, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Mountain Province Diamonds has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, McEwen has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Profitability

This table compares Mountain Province Diamonds and McEwen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mountain Province Diamonds	-117.85%	-72.81%	-19.51%
McEwen	31.40%	13.65%	9.05%

Insider and Institutional Ownership

0.5% of Mountain Province Diamonds shares are owned by institutional investors. Comparatively, 17.0% of McEwen shares are owned by institutional investors. 4.8% of Mountain Province Diamonds shares are owned by insiders. Comparatively, 14.8% of McEwen shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Mountain Province Diamonds and McEwen, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mountain Province Diamonds	0	0	0	0	0.00
McEwen	0	2	4	0	2.67

McEwen has a consensus target price of $29.83, indicating a potential upside of 63.33%. Given McEwen’s stronger consensus rating and higher possible upside, analysts clearly believe McEwen is more favorable than Mountain Province Diamonds.

Summary

McEwen beats Mountain Province Diamonds on 14 of the 14 factors compared between the two stocks.

About Mountain Province Diamonds

Mountain Province Diamonds Inc. focuses on the mining and marketing of rough diamonds worldwide. The company holds a 49% interest in the Gahcho Kué mine comprising mining leases covering an area of 5,216 hectares; and 100% of the mineral rights of the Kennady North consisting of 22 federal leases and 97 claims covering an area of 113,000 hectares located in the Northwest Territories, Canada. The company was formerly known as Mountain Province Mining Inc. and changed its name to Mountain Province Diamonds Inc. in October 2000. Mountain Province Diamonds Inc. was incorporated in 1986 and is headquartered in Toronto, Canada.

About McEwen

McEwen Mining Inc. engages in the exploration, development, production, and sale of gold and silver. It also explores for copper deposits. The company owns 100% interests in the El Gallo and Fenix projects located in Mexico; and the Black Fox Mine and Stock Mill, Grey Fox, and Froome and Tamarack properties in Canada. It also owns interests in the Fuller, Davidson-Tisdale, Buffalo Ankerite, and Paymaster exploration properties located in Canada; and a 49% interest in the San José mine located in Argentina. In addition, the company owns 100% interests in the Gold Bar and Tonkin properties located in Eureka County, Nevada; and interests in the Los Azules copper project located in the cordilleran region in the province of San Juan, Argentina. The company was formerly known as US Gold Corporation and changed its name to McEwen Mining Inc. in January 2012. McEwen Mining Inc. was founded in 1979 and is headquartered in Toronto, Canada.