Critical Comparison: TMC the metals (NASDAQ:TMC) vs. Southern Copper (NYSE:SCCO)

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

Risk and Volatility

TMC the metals has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500. Comparatively, Southern Copper has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Earnings & Valuation

This table compares TMC the metals and Southern Copper’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TMC the metals	N/A	N/A	-$73.78 million	($0.28)	-5.04
Southern Copper	$9.90 billion	8.68	$2.43 billion	$3.01	36.54

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

Institutional & Insider Ownership

4.4% of TMC the metals shares are held by institutional investors. Comparatively, 7.9% of Southern Copper shares are held by institutional investors. 30.0% of TMC the metals shares are held by company insiders. Comparatively, 0.1% of Southern Copper shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares TMC the metals and Southern Copper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TMC the metals	N/A	-304.15%	-114.81%
Southern Copper	24.20%	30.44%	13.93%

Analyst Recommendations

This is a breakdown of current ratings and price targets for TMC the metals and Southern Copper, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TMC the metals	0	1	2	0	2.67
Southern Copper	5	0	2	0	1.57

TMC the metals currently has a consensus price target of $4.10, suggesting a potential upside of 190.78%. Southern Copper has a consensus price target of $84.50, suggesting a potential downside of 23.14%. Given TMC the metals’ stronger consensus rating and higher possible upside, research analysts plainly believe TMC the metals is more favorable than Southern Copper.

Summary

Southern Copper beats TMC the metals on 8 of the 12 factors compared between the two stocks.

About TMC the metals

TMC the metals company Inc., a deep-sea minerals exploration company, focuses on the collection, processing, and refining of polymetallic nodules found on the seafloor in California. It primarily explores for nickel, cobalt, copper, and manganese products. The company holds exploration and commercial rights in three polymetallic nodule contract areas in the Clarion Clipperton Zone of the Pacific Ocean. Its products are used in electric vehicles (EV), renewable energy storage markets, EV wiring, energy transmission, manganese alloy production required for steel production, and other applications. The company was formerly known as Sustainable Opportunities Acquisition Corporation and changed its name to TMC the metals company Inc. TMC the metals company Inc. was founded in 2011 and is based 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 operates as a subsidiary of Americas Mining Corporation.