Analyzing Excellon Resources (OTCMKTS:EXNRF) and Gatos Silver (NYSE:GATO)

Gatos Silver (NYSE:GATO) and Excellon Resources (OTCMKTS:EXNRF) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Risk & Volatility

Gatos Silver has a beta of 2.09, meaning that its share price is 109% more volatile than the S&P 500. Comparatively, Excellon Resources has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Profitability

This table compares Gatos Silver and Excellon Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gatos Silver	N/A	7.41%	7.03%
Excellon Resources	N/A	-53.24%	-75.70%

Insider & Institutional Ownership

44.8% of Gatos Silver shares are held by institutional investors. 3.8% of Gatos Silver shares are held by company insiders. Comparatively, 3.2% of Excellon Resources shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Gatos Silver and Excellon Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gatos Silver	0	2	2	1	2.80
Excellon Resources	0	0	0	0	N/A

Gatos Silver currently has a consensus price target of $12.40, indicating a potential downside of 20.03%. Given Gatos Silver’s higher possible upside, equities research analysts clearly believe Gatos Silver is more favorable than Excellon Resources.

Earnings and Valuation

This table compares Gatos Silver and Excellon Resources”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gatos Silver	N/A	N/A	$12.86 million	$0.22	70.48
Excellon Resources	$25.82 million	0.30	$6.53 million	($0.34)	-0.21

Gatos Silver has higher earnings, but lower revenue than Excellon Resources. Excellon Resources is trading at a lower price-to-earnings ratio than Gatos Silver, indicating that it is currently the more affordable of the two stocks.

Summary

Gatos Silver beats Excellon Resources on 11 of the 12 factors compared between the two stocks.

About Gatos Silver

Gatos Silver, Inc. engages in the exploration, development, and production of precious metals. It primarily explores for silver deposits. The company also explores for zinc, lead, copper, and gold ores. Its flagship asset is the Los Gatos District, including the Cerro Los Gatos mine in Chihuahua, Mexico. The company was formerly known as Sunshine Silver Mining & Refining Corporation and changed its name to Gatos Silver, Inc. in October 2020. Gatos Silver, Inc. was incorporated in 2009 and is headquartered in Vancouver, Canada.

About Excellon Resources

Excellon Resources Inc. engages in the acquisition, exploration, and advancement of mineral properties. It primarily explores for silver, lead, zinc, and gold deposits, as well as base metals. The company holds 100% interests in the Platosa property covering an area of approximately 11,000 hectares located in Durango State, Mexico; the Evolución property that covers an area of 31,280 hectares situated in the states of Durango and Zacatecas, Mexico; and the Silver City project totaling an area of 340 square kilometers in Saxony, Germany. It also holds 100% interests in the Kilgore project comprising 789 unpatented federal lode claims that covers an area of 6,788 hectares located in Clark County, eastern Idaho; and the Oakley project covering an area of 2,833 hectares in Oakley, Idaho. In addition, the company has an option to acquire the La Negra project located in Querétaro State, Mexico. Excellon Resources Inc. was incorporated in 1987 and is based in Toronto, Canada.