Financial Analysis: Southern Copper (NYSE:SCCO) vs. American Lithium (OTCMKTS:LIACF)

American Lithium (OTCMKTS:LIACF) and Southern Copper (NYSE:SCCO) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Insider & Institutional Ownership

0.0% of American Lithium shares are owned by institutional investors. Comparatively, 7.9% of Southern Copper shares are owned by institutional investors. 0.1% of Southern Copper shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for American Lithium and Southern Copper, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Lithium	0	0	0	0	0.00
Southern Copper	4	3	2	0	1.78

Southern Copper has a consensus price target of $94.81, suggesting a potential downside of 2.23%. Given Southern Copper’s stronger consensus rating and higher possible upside, analysts plainly believe Southern Copper is more favorable than American Lithium.

Valuation & Earnings

This table compares American Lithium and Southern Copper”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Lithium	N/A	N/A	-$18.80 million	($0.11)	-3.65
Southern Copper	$10.94 billion	6.96	$2.43 billion	$3.88	24.99

Southern Copper has higher revenue and earnings than American Lithium. American Lithium is trading at a lower price-to-earnings ratio than Southern Copper, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Lithium and Southern Copper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Lithium	N/A	-16.28%	-15.96%
Southern Copper	27.67%	37.11%	17.38%

Risk and Volatility

American Lithium has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, Southern Copper has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Summary

Southern Copper beats American Lithium on 12 of the 13 factors compared between the two stocks.

About American Lithium

American Lithium Corp., an exploration stage company, engages in the identification, acquisition, exploration, and development of resource properties in the United States. It principally focuses on the TLC Claystones project covering an area of approximately 5,052 hectares located in the town of Tonopah, Nevada; and the Falchani Lithium project and the Macusani Uranium project located in Puno, Peru. The company was formerly known as Menika Mining Ltd. and changed its name to American Lithium Corp. in April 2016. American Lithium Corp. was incorporated in 1974 and is headquartered in Vancouver, Canada.

About Southern Copper

Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc, copper, molybdenum, silver, gold, and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant in Mexico. The company also operates Buenavista, an open-pit copper mine, as well as two copper concentrators and two operating SX-EW plants in Mexico. In addition, it operates underground mines that produce zinc, lead, copper, silver, and gold; a coal mine; and a zinc refinery. The company has interests in 156,818 hectares and 502,688 hectares of concessions in Peru and Mexico; and 168,200 hectares and 28,453 hectares of exploration concessions in Argentina and Chile. Southern Copper Corporation was incorporated in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation is a subsidiary of Americas Mining Corporation.