Critical Review: Franco-Nevada (NYSE:FNV) vs. Taseko Mines (NYSE:TGB)

Taseko Mines (NYSE:TGB) and Franco-Nevada (NYSE:FNV) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and target prices for Taseko Mines and Franco-Nevada, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taseko Mines	0	0	1	0	3.00
Franco-Nevada	1	2	4	0	2.43

Taseko Mines currently has a consensus price target of $2.28, indicating a potential upside of 72.73%. Franco-Nevada has a consensus price target of $161.57, indicating a potential upside of 16.07%. Given Taseko Mines’ stronger consensus rating and higher possible upside, equities analysts plainly believe Taseko Mines is more favorable than Franco-Nevada.

Earnings & Valuation

This table compares Taseko Mines and Franco-Nevada’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taseko Mines	$301.22 million	1.26	-$19.98 million	($0.04)	-33.00
Franco-Nevada	$1.32 billion	20.32	$700.60 million	$3.45	40.35

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

Profitability

This table compares Taseko Mines and Franco-Nevada’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Taseko Mines	-2.88%	3.40%	0.92%
Franco-Nevada	53.88%	10.20%	9.88%

Institutional and Insider Ownership

16.8% of Taseko Mines shares are held by institutional investors. Comparatively, 66.7% of Franco-Nevada shares are held by institutional investors. 2.3% of Taseko Mines shares are held by company insiders. Comparatively, 0.7% of Franco-Nevada shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Taseko Mines has a beta of 2.04, meaning that its stock price is 104% more volatile than the S&P 500. Comparatively, Franco-Nevada has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Summary

Franco-Nevada beats Taseko Mines on 10 of the 14 factors compared between the two stocks.

About Taseko Mines

Taseko Mines Limited, a mining company, acquires, develops, and operates mineral properties. It explores for copper, molybdenum, gold, niobium, and silver deposits. The company holds 75% interest in the Gibraltar mine located in British Columbia. It also holds 100% interest in Yellowhead copper project, the Aley niobium project, and the New Prosperity gold and copper project located in British Columbia; and the Florence copper project located in Arizona. Taseko Mines Limited was incorporated in 1966 and is headquartered in Vancouver, Canada.

About Franco-Nevada

Franco-Nevada Corporation operates as a gold-focused royalty and streaming company in Latin America, the United States, Canada, and internationally. It operates through Mining and Energy segments. The company manages its portfolio with a focus on precious metals, such as gold, silver, and platinum group metals; and engages in the sale of crude oil, natural gas, and natural gas liquids. The company was founded in 1986 and is headquartered in Toronto, Canada.