Reviewing Warrior Met Coal (NYSE:HCC) & Nexa Resources (NYSE:NEXA)
by Sarita Garza · The Markets DailyNexa Resources (NYSE:NEXA – Get Free Report) and Warrior Met Coal (NYSE:HCC – Get Free Report) are both materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.
Profitability
This table compares Nexa Resources and Warrior Met Coal’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nexa Resources | 8.02% | 20.25% | 5.28% |
| Warrior Met Coal | 13.05% | 10.02% | 7.84% |
Dividends
Nexa Resources pays an annual dividend of $0.10 per share and has a dividend yield of 0.8%. Warrior Met Coal pays an annual dividend of $0.32 per share and has a dividend yield of 0.4%. Nexa Resources pays out 4.8% of its earnings in the form of a dividend. Warrior Met Coal pays out 7.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Warrior Met Coal has raised its dividend for 1 consecutive years. Nexa Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a summary of recent recommendations and price targets for Nexa Resources and Warrior Met Coal, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nexa Resources | 1 | 6 | 0 | 0 | 1.86 |
| Warrior Met Coal | 0 | 4 | 4 | 0 | 2.50 |
Nexa Resources presently has a consensus target price of $14.60, indicating a potential upside of 19.13%. Warrior Met Coal has a consensus target price of $103.83, indicating a potential upside of 16.61%. Given Nexa Resources’ higher possible upside, analysts clearly believe Nexa Resources is more favorable than Warrior Met Coal.
Risk and Volatility
Nexa Resources has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Warrior Met Coal has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.
Insider & Institutional Ownership
92.3% of Warrior Met Coal shares are owned by institutional investors. 2.1% of Warrior Met Coal shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Nexa Resources and Warrior Met Coal”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nexa Resources | $3.46 billion | 0.47 | $132.63 million | $2.09 | 5.86 |
| Warrior Met Coal | $1.68 billion | 2.80 | $57.00 million | $4.16 | 21.41 |
Nexa Resources has higher revenue and earnings than Warrior Met Coal. Nexa Resources is trading at a lower price-to-earnings ratio than Warrior Met Coal, indicating that it is currently the more affordable of the two stocks.
Summary
Warrior Met Coal beats Nexa Resources on 10 of the 17 factors compared between the two stocks.
About Nexa Resources
Nexa Resources S.A., together with its subsidiaries, engages in the zinc mining and smelting business worldwide. The company operates in two segments, Mining and Smelting. It produces zinc, zamac, zinc oxide, and zincal, as well as by-products, such as copper, lead, silver, gold, copper sulfate, sulfuric acid, copper cementum, silver concentrate, slag aggregates, and cadmium/sponge deposits. The company owns and operates six polymetallic mines, including three located in the Central Andes of Peru; two located in the State of Minas Gerais in Brazil; and one located in the State of Mato Grosso in Brazil. It also owns and operates three zinc smelters comprising one located in Cajamarquilla in Peru; and two located in the State of Minas Gerais in Brazil, which recovers and produces metallic zinc, zinc oxide, and by-products, such as sulfuric acid. The company also exports its products. Its products are used in civil construction, transportation, energy, agriculture, health, and consumer goods industries. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is based in Luxembourg, Luxembourg. Nexa Resources S.A. operates as a subsidiary of Votorantim S.A.
About Warrior Met Coal
Warrior Met Coal, Inc. produces and exports non-thermal metallurgical coal for the steel industry. It operates two underground mines located in Alabama. The company sells its metallurgical coal to a customer base of blast furnace steel producers located primarily in Europe, South America, and Asia. It also sells natural gas, which is extracted as a byproduct from coal production. Warrior Met Coal, Inc. was incorporated in 2015 and is headquartered in Brookwood, Alabama.