Critical Survey: Freeport-McMoRan (NYSE:FCX) versus Toro Energy (OTCMKTS:TOEYF)

Freeport-McMoRan (NYSE:FCX) and Toro Energy (OTCMKTS:TOEYF) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Profitability

This table compares Freeport-McMoRan and Toro Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freeport-McMoRan	7.45%	7.37%	3.87%
Toro Energy	N/A	N/A	N/A

Valuation & Earnings

This table compares Freeport-McMoRan and Toro Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freeport-McMoRan	$25.46 billion	2.33	$1.89 billion	$1.32	31.29
Toro Energy	N/A	N/A	N/A	N/A	N/A

Freeport-McMoRan has higher revenue and earnings than Toro Energy.

Volatility and Risk

Freeport-McMoRan has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500. Comparatively, Toro Energy has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.

Insider and Institutional Ownership

80.8% of Freeport-McMoRan shares are owned by institutional investors. 0.8% of Freeport-McMoRan shares are owned by 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.

Analyst Recommendations

This is a breakdown of recent ratings for Freeport-McMoRan and Toro Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freeport-McMoRan	0	8	8	2	2.67
Toro Energy	0	0	0	0	0.00

Freeport-McMoRan currently has a consensus price target of $51.00, suggesting a potential upside of 23.47%. Given Freeport-McMoRan’s stronger consensus rating and higher probable upside, analysts clearly believe Freeport-McMoRan is more favorable than Toro Energy.

Summary

Freeport-McMoRan beats Toro Energy on 11 of the 11 factors compared between the two stocks.

About Freeport-McMoRan

Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. It primarily explores for copper, gold, molybdenum, silver, and other metals. The company's assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Chino and Tyrone in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile. The company was formerly known as Freeport-McMoRan Copper & Gold Inc. and changed its name to Freeport-McMoRan Inc. in July 2014. Freeport-McMoRan Inc. was incorporated in 1987 and is headquartered in Phoenix, Arizona.

About Toro Energy

Toro Energy Limited engages in the exploration, evaluation, and development of uranium properties in Australia. The company explores for uranium, nickel, gold, and base metals. Its flagship project is the Wiluna uranium project located in the northern goldfields region of Western Australia. Toro Energy Limited is headquartered in West Perth, Australia. Toro Energy Limited operates as a subsidiary of Mega Uranium Ltd.