Ternium (NYSE:TX) vs. Triple Flag Precious Metals (NYSE:TFPM) Critical Comparison

Triple Flag Precious Metals (NYSE:TFPM) and Ternium (NYSE:TX) are both materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Triple Flag Precious Metals and Ternium, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Triple Flag Precious Metals	0	4	5	0	2.56
Ternium	0	5	6	0	2.55

Triple Flag Precious Metals currently has a consensus price target of $39.25, indicating a potential upside of 27.59%. Ternium has a consensus price target of $57.17, indicating a potential upside of 12.47%. Given Triple Flag Precious Metals’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Triple Flag Precious Metals is more favorable than Ternium.

Volatility and Risk

Triple Flag Precious Metals has a beta of -0.09, indicating that its stock price is 109% less volatile than the S&P 500. Comparatively, Ternium has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Valuation and Earnings

This table compares Triple Flag Precious Metals and Ternium”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Triple Flag Precious Metals	$501.80 million	12.61	$240.01 million	$2.00	15.38
Ternium	$16.69 billion	0.61	$425.23 million	$4.88	10.42

Ternium has higher revenue and earnings than Triple Flag Precious Metals. Ternium is trading at a lower price-to-earnings ratio than Triple Flag Precious Metals, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Triple Flag Precious Metals and Ternium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Triple Flag Precious Metals	82.56%	13.56%	12.81%
Ternium	5.74%	5.77%	3.92%

Insider and Institutional Ownership

82.9% of Triple Flag Precious Metals shares are owned by institutional investors. Comparatively, 12.0% of Ternium shares are owned by institutional investors. 0.0% of Ternium shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Triple Flag Precious Metals pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. Ternium pays an annual dividend of $1.80 per share and has a dividend yield of 3.5%. Triple Flag Precious Metals pays out 12.0% of its earnings in the form of a dividend. Ternium pays out 36.9% 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. Triple Flag Precious Metals has increased its dividend for 2 consecutive years.

Summary

Triple Flag Precious Metals beats Ternium on 10 of the 17 factors compared between the two stocks.

About Triple Flag Precious Metals

Triple Flag Precious Metals Corp. is a precious metals streaming and royalty company. It provides mining companies with upfront financing in exchange for the right to purchase a portion of future metal production or receive royalty payments tied to production or revenue. The company’s portfolio is focused on gold and silver, with exposure to other metals through some assets. Triple Flag holds interests in mines and development projects across several regions, including the Americas, Australia and Africa.

About Ternium

Ternium is a steel producer serving customers across the Americas. Its operations span the steelmaking process, from iron ore extraction and processing to the manufacture and distribution of steel products. The company produces flat and long steel products, including slabs, hot- and cold-rolled steel, coated steel, tinplate, and bars. These materials are used in industries such as construction, automotive manufacturing, appliances, energy, and packaging. Ternium’s roots include steel businesses in Argentina and Mexico, and it was established in 2005.