Critical Analysis: Capstone Copper (OTCMKTS:CSFFF) & McEwen (NYSE:MUX)

Capstone Copper (OTCMKTS:CSFFF) and McEwen (NYSE:MUX) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Earnings & Valuation

This table compares Capstone Copper and McEwen”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capstone Copper	$1.60 billion	0.00	$82.91 million	$0.11	N/A
McEwen	$197.55 million	5.25	$34.43 million	$1.18	14.72

Capstone Copper has higher revenue and earnings than McEwen. Capstone Copper is trading at a lower price-to-earnings ratio than McEwen, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Capstone Copper and McEwen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capstone Copper	14.67%	3.23%	1.72%
McEwen	31.40%	13.65%	9.05%

Analyst Ratings

This is a summary of current ratings and target prices for Capstone Copper and McEwen, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capstone Copper	0	0	0	0	0.00
McEwen	0	2	3	0	2.60

McEwen has a consensus price target of $29.83, indicating a potential upside of 71.81%. Given McEwen’s stronger consensus rating and higher probable upside, analysts clearly believe McEwen is more favorable than Capstone Copper.

Institutional and Insider Ownership

0.6% of Capstone Copper shares are held by institutional investors. Comparatively, 17.0% of McEwen shares are held by institutional investors. 14.8% of McEwen shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

McEwen beats Capstone Copper on 9 of the 11 factors compared between the two stocks.

About Capstone Copper

Capstone Mining Corp. engages in the exploration and production of base metals in the United States, Mexico, Canada, and Chile. The company explores for copper, molybdenum, silver, zinc, lead, iron, and gold deposits. It holds interests in the Pinto Valley, an open pit copper mine located in Arizona, the United States; and the Cozamin, a copper-silver underground mine located in the state of Zacatecas, Mexico. The company also owns a 100% interest in copper-iron-gold Santo Domingo development project in Region III, Chile. The company was formerly known as Capstone Gold Corp. and changed its name to Capstone Mining Corp. in February 2006. The company is headquartered in Vancouver, Canada.

About McEwen

McEwen Mining Inc. engages in the exploration, development, production, and sale of gold and silver. It also explores for copper deposits. The company owns 100% interests in the El Gallo and Fenix projects located in Mexico; and the Black Fox Mine and Stock Mill, Grey Fox, and Froome and Tamarack properties in Canada. It also owns interests in the Fuller, Davidson-Tisdale, Buffalo Ankerite, and Paymaster exploration properties located in Canada; and a 49% interest in the San José mine located in Argentina. In addition, the company owns 100% interests in the Gold Bar and Tonkin properties located in Eureka County, Nevada; and interests in the Los Azules copper project located in the cordilleran region in the province of San Juan, Argentina. The company was formerly known as US Gold Corporation and changed its name to McEwen Mining Inc. in January 2012. McEwen Mining Inc. was founded in 1979 and is headquartered in Toronto, Canada.