Analyzing McEwen (NYSE:MUX) and Largo (NYSE:LGO)

Largo (NYSE:LGO) and McEwen (NYSE:MUX) are both small-cap materials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Valuation & Earnings

This table compares Largo and McEwen”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Largo	$127.06 million	0.37	-$30.34 million	($1.07)	-0.39
McEwen	$197.55 million	4.85	$34.43 million	$1.26	12.40

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

Institutional and Insider Ownership

64.1% of Largo shares are owned by institutional investors. Comparatively, 17.0% of McEwen shares are owned by institutional investors. 0.3% of Largo shares are owned by company insiders. Comparatively, 14.8% of McEwen shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Largo and McEwen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Largo	-35.10%	-22.61%	-14.29%
McEwen	32.46%	13.48%	9.13%

Analyst Ratings

This is a summary of current recommendations for Largo and McEwen, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Largo	0	0	2	0	3.00
McEwen	0	2	2	0	2.50

Largo presently has a consensus target price of $2.10, suggesting a potential upside of 404.81%. McEwen has a consensus target price of $29.50, suggesting a potential upside of 88.80%. Given Largo’s stronger consensus rating and higher possible upside, research analysts clearly believe Largo is more favorable than McEwen.

Volatility and Risk

Largo has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500. Comparatively, McEwen has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Summary

McEwen beats Largo on 9 of the 13 factors compared between the two stocks.

About Largo

Largo Inc. engages in the development and sale of vanadium-based energy storage systems in Canada. The company operates through, Sales & Trading, Mine Properties, Corporate, Exploration and Evaluation Properties, and Largo Clean Energy and Largo Physical Vanadium Segments. Its products include VPURE+ vanadium flakes that are used in the production of master alloys and aerospace applications; VPURE vanadium flakes ferrovanadium and vanadium carbon nitride for the steel industry; and VPURE+ vanadium powder for catalyst applications. The company offers renewable energy storage solutions through Largo Clean Energy. Its products are sourced from vanadium deposits at the Maracás Menchen Mine in Brazil. The company was formerly known as Largo Resources Ltd. and changed its name to Largo Inc. in November 2021. The company was incorporated in 1988 and is headquartered in Toronto, Canada.

About McEwen

McEwen Mining Inc. engages in the exploration, development, production, and sale of gold and silver. It also explores for copper deposits. The company owns 100% interests in the El Gallo and Fenix projects located in Mexico; and the Black Fox Mine and Stock Mill, Grey Fox, and Froome and Tamarack properties in Canada. It also owns interests in the Fuller, Davidson-Tisdale, Buffalo Ankerite, and Paymaster exploration properties located in Canada; and a 49% interest in the San José mine located in Argentina. In addition, the company owns 100% interests in the Gold Bar and Tonkin properties located in Eureka County, Nevada; and interests in the Los Azules copper project located in the cordilleran region in the province of San Juan, Argentina. The company was formerly known as US Gold Corporation and changed its name to McEwen Mining Inc. in January 2012. McEwen Mining Inc. was founded in 1979 and is headquartered in Toronto, Canada.