BHP Billiton PLC (NYSE: BBL) and Fortuna Silver Mines (NYSE:FSM) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.
Risk & Volatility
BHP Billiton PLC has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Fortuna Silver Mines has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500.
Profitability
This table compares BHP Billiton PLC and Fortuna Silver Mines’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| BHP Billiton PLC | N/A | N/A | N/A |
| Fortuna Silver Mines | 15.97% | 9.08% | 7.07% |
Dividends
BHP Billiton PLC pays an annual dividend of $1.08 per share and has a dividend yield of 3.1%. Fortuna Silver Mines does not pay a dividend.
Earnings & Valuation
This table compares BHP Billiton PLC and Fortuna Silver Mines’ revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| BHP Billiton PLC | $34.69 billion | 2.68 | $15.48 billion | N/A | N/A |
| Fortuna Silver Mines | $251.82 million | 2.79 | $118.59 million | $0.25 | 17.68 |
BHP Billiton PLC has higher revenue and earnings than Fortuna Silver Mines.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for BHP Billiton PLC and Fortuna Silver Mines, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| BHP Billiton PLC | 1 | 5 | 1 | 0 | 2.00 |
| Fortuna Silver Mines | 0 | 1 | 3 | 1 | 3.00 |
BHP Billiton PLC currently has a consensus target price of $34.00, indicating a potential downside of 2.72%. Fortuna Silver Mines has a consensus target price of $9.00, indicating a potential upside of 103.62%. Given Fortuna Silver Mines’ stronger consensus rating and higher probable upside, analysts clearly believe Fortuna Silver Mines is more favorable than BHP Billiton PLC.
Institutional & Insider Ownership
4.3% of BHP Billiton PLC shares are owned by institutional investors. Comparatively, 51.3% of Fortuna Silver Mines shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Fortuna Silver Mines beats BHP Billiton PLC on 9 of the 14 factors compared between the two stocks.
About BHP Billiton PLC
BHP Billiton Plc is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. It extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. It manages product distribution through its global logistics chain, including freight and pipeline transportation. It sells its products through direct supply agreements with its customers and on global commodity exchanges.
About Fortuna Silver Mines
Fortuna Silver Mines Inc. is a Canada-based mining company engaged in silver mining and related activities in Latin America, including exploration, extraction and processing. The Company operates the Caylloma silver, lead, and zinc mine (Caylloma) in southern Peru and the San Jose silver and gold mine (San Jose) in southern Mexico. The Company’s segments include Corporate, Bateas and Cuzcatlan. The Company owns interest in the Caylloma mine and related mining concessions located in southern Peru. The Caylloma property is located in the Caylloma Mining District, approximately 220 kilometers north-northwest of Arequipa, Peru. The Company produces approximately 1.7 million ounces of silver and over 1,160 ounces of gold at Caylloma. The Company’s San Jose property, which covers a silver gold bearing epithermal vein system is located in the state of Oaxaca in southern Mexico. The Company produces approximately 4.9 million ounces of silver and over 38,530 ounces of gold at San Jose.
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