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

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

Insider and Institutional Ownership

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

Profitability

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

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

Volatility and Risk

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

Analyst Ratings

This is a summary of current ratings and target prices for Gatos Silver and First Majestic Silver, as reported by MarketBeat.com.

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

Gatos Silver presently has a consensus price target of $10.25, indicating a potential downside of 2.57%. First Majestic Silver has a consensus price target of $15.75, indicating a potential upside of 117.39%. Given First Majestic Silver’s higher probable upside, analysts clearly believe First Majestic Silver is more favorable than Gatos Silver.

Earnings & Valuation

This table compares Gatos Silver and First Majestic Silver’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gatos Silver	N/A	N/A	$12.86 million	$0.19	55.37
First Majestic Silver	$573.80 million	3.63	-$135.11 million	($0.48)	-15.09

Gatos Silver has higher earnings, but lower revenue 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.

Summary

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

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.

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.