Contrasting First Majestic Silver (NYSE:AG) & Gatos Silver (NYSE:GATO)

First Majestic Silver (NYSE:AG) and Gatos Silver (NYSE:GATO) are both small-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Risk and Volatility

First Majestic Silver has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, Gatos Silver has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500.

Insider & Institutional Ownership

27.2% of First Majestic Silver shares are owned by institutional investors. Comparatively, 44.8% of Gatos Silver shares are owned by institutional investors. 0.9% of First Majestic Silver shares are owned by company insiders. Comparatively, 1.5% of Gatos Silver shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares First Majestic Silver and Gatos Silver’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Majestic Silver	-23.55%	-1.85%	-1.26%
Gatos Silver	N/A	3.63%	3.33%

Earnings & Valuation

This table compares First Majestic Silver and Gatos Silver’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Majestic Silver	$573.80 million	3.35	-$135.11 million	($0.48)	-13.96
Gatos Silver	N/A	N/A	$12.86 million	$0.19	51.37

Gatos Silver has lower revenue, but higher earnings than First Majestic Silver. First Majestic Silver is trading at a lower price-to-earnings ratio than Gatos Silver, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for First Majestic Silver and Gatos Silver, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Majestic Silver	0	1	1	0	2.50
Gatos Silver	0	2	2	0	2.50

First Majestic Silver currently has a consensus price target of $15.75, indicating a potential upside of 135.07%. Gatos Silver has a consensus price target of $10.25, indicating a potential upside of 5.02%. Given First Majestic Silver’s higher possible upside, research analysts clearly believe First Majestic Silver is more favorable than Gatos Silver.

Summary

Gatos Silver beats First Majestic Silver on 10 of the 12 factors compared between the two stocks.

About First Majestic Silver

First Majestic Silver Corp. engages in the acquisition, exploration, development, and production of mineral properties with a focus on silver and gold production in North America. Its projects include the San Dimas mine covering an area of approximately 71,867 hectares located in Durango State, Mexico; the Santa Elena that covers an area of approximately 102,244 hectares located in Sonora State, México; and the La Encantada covering an area of approximately 4,076 hectares located in Coahuila State, México. The company was formerly known as First Majestic Resource Corp. and changed its name to First Majestic Silver Corp. in November 2006. First Majestic Silver Corp. was incorporated in 1979 and is headquartered in Vancouver, Canada.

About Gatos Silver

Gatos Silver, Inc. engages in the exploration, development, and production of precious metals. It primarily explores for silver deposits. The company also explores for zinc, lead, copper, and gold ores. Its flagship asset is the Los Gatos District, including the Cerro Los Gatos mine in Chihuahua, Mexico. The company was formerly known as Sunshine Silver Mining & Refining Corporation and changed its name to Gatos Silver, Inc. in October 2020. Gatos Silver, Inc. was incorporated in 2009 and is headquartered in Vancouver, Canada.