Contrasting Sigma Lithium (NASDAQ:SGML) and Nexa Resources (NYSE:NEXA)

Nexa Resources (NYSE:NEXAGet Rating) and Sigma Lithium (NASDAQ:SGMLGet Rating) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Earnings and Valuation

This table compares Nexa Resources and Sigma Lithium’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nexa Resources $2.62 billion 0.25 $114.33 million $1.17 4.26
Sigma Lithium N/A N/A -$27.04 million ($0.48) -53.40

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

Profitability

This table compares Nexa Resources and Sigma Lithium’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nexa Resources 5.36% 8.87% 3.10%
Sigma Lithium N/A -37.08% -35.00%

Insider and Institutional Ownership

6.9% of Nexa Resources shares are owned by institutional investors. Comparatively, 5.7% of Sigma Lithium shares are owned by institutional investors. 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 recommendations and price targets for Nexa Resources and Sigma Lithium, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nexa Resources 0 0 1 0 3.00
Sigma Lithium 0 0 2 0 3.00

Nexa Resources presently has a consensus target price of $9.80, suggesting a potential upside of 96.79%. Sigma Lithium has a consensus target price of $22.50, suggesting a potential downside of 12.21%. Given Nexa Resources’ higher possible upside, analysts plainly believe Nexa Resources is more favorable than Sigma Lithium.

Summary

Nexa Resources beats Sigma Lithium on 8 of the 9 factors compared between the two stocks.

About Nexa Resources

(Get Rating)

Nexa Resources S.A., together with its subsidiaries, engages in the zinc mining and smelting business. The company also produces zinc, silver, gold, copper cement, lead, sulfuric acid, sulfur dioxide, copper sulfate, and limestone deposits. It owns and operates five underground polymetallic mines, including three located in the Central Andes of Peru; and two located in the State of Minas Gerais in Brazil. The company also develops the Aripuanã project located in Mato Grosso, Brazil. It exports its products. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is based in Luxembourg, Luxembourg. Nexa Resources S.A. is a subsidiary of Votorantim S.A.

About Sigma Lithium

(Get Rating)

Sigma Lithium Corporation engages in the exploration and development of lithium deposits in Brazil. It holds 100% interest in the Grota do Cirilo, Genipapo, Santa Clara, and São José properties comprising 27 mineral rights covering an area of approximately 191 square kilometers located in the Araçuaí and Itinga regions of the state of Minas Gerais, Brazil. The company was formerly known as Sigma Lithium Resources Corporation and changed its name to Sigma Lithium Corporation in July 2021. Sigma Lithium Corporation is headquartered in São Paulo, Brazil.

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