First Majestic Silver (AG) & Wheaton Precious Metals (WPM) Financial Analysis

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First Majestic Silver (NYSE:AG) and Wheaton Precious Metals (NYSE:WPM) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Institutional & Insider Ownership

26.3% of First Majestic Silver shares are owned by institutional investors. Comparatively, 55.5% of Wheaton Precious Metals shares are owned by institutional investors. 0.9% of First Majestic Silver shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares First Majestic Silver and Wheaton Precious Metals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Majestic Silver -67.85% -5.77% -3.80%
Wheaton Precious Metals 53.79% 4.18% 3.45%

Earnings and Valuation

This table compares First Majestic Silver and Wheaton Precious Metals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Majestic Silver $300.93 million 4.10 -$204.16 million ($0.21) -29.86
Wheaton Precious Metals $794.01 million 12.94 $427.11 million $0.48 48.17

Wheaton Precious Metals has higher revenue and earnings than First Majestic Silver. First Majestic Silver 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.

Dividends

Wheaton Precious Metals pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. First Majestic Silver does not pay a dividend. Wheaton Precious Metals pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent ratings for First Majestic Silver and Wheaton Precious Metals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Majestic Silver 0 4 3 0 2.43
Wheaton Precious Metals 0 4 5 0 2.56

First Majestic Silver currently has a consensus price target of $7.69, indicating a potential upside of 22.61%. Wheaton Precious Metals has a consensus price target of $32.00, indicating a potential upside of 38.41%. Given Wheaton Precious Metals’ stronger consensus rating and higher possible upside, analysts clearly believe Wheaton Precious Metals is more favorable than First Majestic Silver.

Summary

Wheaton Precious Metals beats First Majestic Silver on 13 of the 15 factors compared between the two stocks.

About First Majestic Silver

First Majestic Silver Corp. engages in the acquisition, exploration, development, and production of mineral properties with a focus on silver production in Mexico. It owns and operates six silver producing mines, including the Santa Elena Silver/Gold Mine covering an area of 101,837 hectares located in Sonora; La Encantada Silver Mine covering an area of 4,076 hectares situated in Coahuila; La Parrilla Silver Mine covering an area of 69,478 hectares located in Durango; Del Toro Silver Mine covering an area of 2,159 hectares situated in Zacatecas; San Martin Silver Mine covering an area of 38,512 hectares located in Jalisco; and La Guitarra Silver Mine that consists of 39,714 hectares situated in México State. The company was formerly known as First Majestic Resource Corp. and changed its name to First Majestic Silver Corp. in November 2006. First Majestic Silver Corp. was founded in 1979 and is headquartered in Vancouver, Canada.

About Wheaton Precious Metals

Wheaton Precious Metals Corp. operates as a silver and gold streaming company in Canada and internationally. It has streaming agreements for 20 operating mines and 9 development stage projects. 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.

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