Reviewing HudBay Minerals (NYSE:HBM) and Reliance (NYSE:RS)

Reliance (NYSE:RS) and HudBay Minerals (NYSE:HBM) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Volatility and Risk

Reliance has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, HudBay Minerals has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.

Institutional and Insider Ownership

79.3% of Reliance shares are owned by institutional investors. Comparatively, 57.8% of HudBay Minerals shares are owned by institutional investors. 0.4% of Reliance shares are owned by insiders. Comparatively, 0.3% of HudBay Minerals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Reliance and HudBay Minerals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reliance	1	5	2	0	2.12
HudBay Minerals	0	2	10	1	2.92

Reliance currently has a consensus target price of $363.83, indicating a potential downside of 5.48%. HudBay Minerals has a consensus target price of $30.67, indicating a potential upside of 46.61%. Given HudBay Minerals’ stronger consensus rating and higher possible upside, analysts clearly believe HudBay Minerals is more favorable than Reliance.

Profitability

This table compares Reliance and HudBay Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reliance	5.42%	11.37%	7.77%
HudBay Minerals	27.75%	10.04%	5.36%

Dividends

Reliance pays an annual dividend of $5.00 per share and has a dividend yield of 1.3%. HudBay Minerals pays an annual dividend of $0.03 per share and has a dividend yield of 0.1%. Reliance pays out 32.6% of its earnings in the form of a dividend. HudBay Minerals pays out 1.8% 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. Reliance has raised its dividend for 15 consecutive years. Reliance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Reliance and HudBay Minerals”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reliance	$14.29 billion	1.37	$739.40 million	$15.33	25.11
HudBay Minerals	$2.21 billion	4.20	$568.50 million	$1.66	12.60

Reliance has higher revenue and earnings than HudBay Minerals. HudBay Minerals is trading at a lower price-to-earnings ratio than Reliance, indicating that it is currently the more affordable of the two stocks.

Summary

Reliance beats HudBay Minerals on 10 of the 18 factors compared between the two stocks.

About Reliance

Reliance, Inc. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was formerly known as Reliance Steel & Aluminum Co. and changed its name to Reliance, Inc. in February 2024. Reliance, Inc. was founded in 1939 and is based in Scottsdale, Arizona.

About HudBay Minerals

Hudbay Minerals Inc., a diversified mining company, focuses on the exploration, development, operation, and optimization of properties in North and South America. It produces copper concentrates containing gold, silver, and molybdenum; gold concentrates containing zinc; zinc concentrates; molybdenum concentrates; and silver/gold doré. The company's flagship project is the 100% owned Constancia mine located in the Province of Chumbivilcas in southern Peru. Hudbay Minerals Inc. was founded in 1927 and is based in Toronto, Canada.