Critical Analysis: Mountain Province Diamonds (MDM) vs. Silver Wheaton Corp (WPM)

Silver Wheaton Corp (NYSE: WPM) and Mountain Province Diamonds (NASDAQ:MDM) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Risk & Volatility

Silver Wheaton Corp has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Mountain Province Diamonds has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Insider and Institutional Ownership

50.5% of Silver Wheaton Corp shares are owned by institutional investors. Comparatively, 22.7% of Mountain Province Diamonds shares are owned by institutional investors. 4.8% of Mountain Province Diamonds 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.

Dividends

Silver Wheaton Corp pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Mountain Province Diamonds does not pay a dividend. Silver Wheaton Corp pays out 56.0% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Silver Wheaton Corp and Mountain Province Diamonds’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Silver Wheaton Corp $902.00 million 9.28 $617.05 million $0.50 37.90
Mountain Province Diamonds N/A N/A N/A $0.02 255.00

Silver Wheaton Corp has higher revenue and earnings than Mountain Province Diamonds. Silver Wheaton Corp is trading at a lower price-to-earnings ratio than Mountain Province Diamonds, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Silver Wheaton Corp and Mountain Province Diamonds’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silver Wheaton Corp 25.05% 5.92% 4.75%
Mountain Province Diamonds N/A -10.46% -4.34%

Analyst Recommendations

This is a breakdown of recent recommendations for Silver Wheaton Corp and Mountain Province Diamonds, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silver Wheaton Corp 0 1 2 0 2.67
Mountain Province Diamonds 0 2 1 0 2.33

Silver Wheaton Corp currently has a consensus target price of $27.67, suggesting a potential upside of 46.00%. Mountain Province Diamonds has a consensus target price of $7.50, suggesting a potential upside of 47.06%. Given Mountain Province Diamonds’ higher possible upside, analysts clearly believe Mountain Province Diamonds is more favorable than Silver Wheaton Corp.

Summary

Silver Wheaton Corp beats Mountain Province Diamonds on 9 of the 13 factors compared between the two stocks.

Silver Wheaton Corp Company Profile

Wheaton Precious Metals Corp, formerly Silver Wheaton Corp, is a Canada-based pure precious metals streaming company engaged in the sale of silver and gold. The Company operates through eight segments: the silver produced by the San Dimas, Penasquito and Antamina mines, the gold produced by the Sudbury and Salobo mines, the silver and gold produced by the Constancia mine and the Other mines, and corporate operations. The Company has entered into long-term purchase agreements and early deposit long-term purchase agreement associated with silver and gold (precious metal purchase agreements), relating to mining assets, whereby Silver Wheaton acquires silver and gold production at various mines. The San Dimas gold-silver deposit is located in the San Dimas district on the border of Durango and Sinaloa states. The Company holds interest in Los Filos mine, Zinkgruvan mining operations, Stratoni mine, Keno Hill silver, Cozamin mine, Aljustrel mine, 777 mine and Constancia mines.

Mountain Province Diamonds Company Profile

Mountain Province Diamonds Inc. is a resource company. The Company is focused on the mining and marketing of rough diamonds to the global market. The Company holds interests in the GK Diamond Mine. The GK Diamond Mine is located in the Northwest Territories (NWT) of Canada, in the District of Mackenzie, 300 kilometers east-northeast of Yellowknife and 80 kilometers east-southeast of the Snap Lake Mine. The GK Diamond Mine includes various kimberlite deposits, such as 5034, Hearne, Tesla and Tuzo. The GK Diamond Mine covers approximately 10,350 acres. The GK Diamond Mine includes four mining leases (numbers 4341, 4199, 4200 and 4201).

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