Critical Analysis: Jaguar Mining (OTCMKTS:JAGGD) & Freeport-McMoRan (NYSE:FCX)

Jaguar Mining (OTCMKTS:JAGGD) and Freeport-McMoRan (NYSE:FCX) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Dividends

Jaguar Mining pays an annual dividend of $0.25 per share and has a dividend yield of 13.7%. Freeport-McMoRan pays an annual dividend of $0.30 per share and has a dividend yield of 0.8%. Jaguar Mining pays out 49.0% of its earnings in the form of a dividend. Freeport-McMoRan pays out 23.3% 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.

Profitability

This table compares Jaguar Mining and Freeport-McMoRan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jaguar Mining	28.17%	26.75%	17.80%
Freeport-McMoRan	7.42%	7.50%	3.92%

Institutional & Insider Ownership

80.8% of Freeport-McMoRan shares are owned by institutional investors. 0.8% of Freeport-McMoRan shares are owned by insiders. 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.

Analyst Ratings

This is a summary of current recommendations for Jaguar Mining and Freeport-McMoRan, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jaguar Mining	0	0	0	0	0.00
Freeport-McMoRan	0	8	6	1	2.53

Freeport-McMoRan has a consensus target price of $51.46, suggesting a potential upside of 36.02%. Given Freeport-McMoRan’s stronger consensus rating and higher possible upside, analysts plainly believe Freeport-McMoRan is more favorable than Jaguar Mining.

Volatility and Risk

Jaguar Mining has a beta of 2.75, meaning that its stock price is 175% more volatile than the S&P 500. Comparatively, Freeport-McMoRan has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500.

Earnings and Valuation

This table compares Jaguar Mining and Freeport-McMoRan”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jaguar Mining	$97.23 million	1.33	-$150,000.00	$0.50	3.58
Freeport-McMoRan	$25.46 billion	2.14	$1.89 billion	$1.29	29.33

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

Summary

Freeport-McMoRan beats Jaguar Mining on 12 of the 17 factors compared between the two stocks.

About Jaguar Mining

Jaguar Mining, Inc. engages in the acquisition, exploration, development and operation of gold producing properties in Brazil. Its mining operations include Turmalina, Paciência and Caeté. The firm is also developing the Grurupi Project and exploring the Iron Quadrangle and Pedra Branca Project. The company was founded by Daniel R. Titcomb in 1984 and is headquartered Toronto, Canada.

About Freeport-McMoRan

Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. It primarily explores for copper, gold, molybdenum, silver, and other metals. The company's assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Chino and Tyrone in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile. The company was formerly known as Freeport-McMoRan Copper & Gold Inc. and changed its name to Freeport-McMoRan Inc. in July 2014. Freeport-McMoRan Inc. was incorporated in 1987 and is headquartered in Phoenix, Arizona.