Financial Comparison: Vallourec (OTCMKTS:VLOWY) and Pan American Silver (NYSE:PAAS)

Pan American Silver (NYSE:PAAS) and Vallourec (OTCMKTS:VLOWY) are both materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Dividends

Pan American Silver pays an annual dividend of $0.74 per share and has a dividend yield of 1.5%. Vallourec pays an annual dividend of $0.35 per share and has a dividend yield of 7.9%. Pan American Silver pays out 22.4% of its earnings in the form of a dividend. Vallourec pays out 106.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pan American Silver has increased its dividend for 2 consecutive years.

Insider and Institutional Ownership

55.4% of Pan American Silver shares are owned by institutional investors. 12.9% of Pan American Silver shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Pan American Silver and Vallourec, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pan American Silver	0	3	7	0	2.70
Vallourec	0	0	1	0	3.00

Pan American Silver currently has a consensus target price of $70.43, indicating a potential upside of 45.38%. Given Pan American Silver’s higher probable upside, research analysts plainly believe Pan American Silver is more favorable than Vallourec.

Profitability

This table compares Pan American Silver and Vallourec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pan American Silver	32.04%	20.01%	14.48%
Vallourec	9.49%	14.98%	7.50%

Risk and Volatility

Pan American Silver has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Vallourec has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Valuation and Earnings

This table compares Pan American Silver and Vallourec”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pan American Silver	$3.62 billion	5.56	$978.00 million	$3.31	14.64
Vallourec	$4.31 billion	1.36	$401.23 million	$0.33	13.36

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

Summary

Pan American Silver beats Vallourec on 14 of the 17 factors compared between the two stocks.

About Pan American Silver

Pan American Silver Corp. engages in the exploration, mine development, extraction, processing, refining, and reclamation of silver, gold, zinc, lead, and copper mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil. The company was formerly known as Pan American Minerals Corp. and changed its name to Pan American Silver Corp. in April 1995. Pan American Silver Corp. was incorporated in 1979 and is headquartered in Vancouver, Canada.

About Vallourec

Vallourec S.A., through its subsidiaries, provides tubular solutions for the oil and gas, industry, and energy markets in Europe, North America, South America, Asia, the Middle East, and internationally. It operates through Tubes; Mine & Forests; and Holding Companies & Other segments. The company offers seamless tubes for refineries, petrochemical facilities, and floating liquefied natural gas plants, as well as production, storage, and offloading units; VAM connections; rigid subsea line pipes and onshore rigid line pipes; and carbon steel and steel alloy tubes, hollow bars, and connections. It also provides assistance in lowering tubes, inspecting connections, and supervising assembly; thread tubes inventory management; tube inspection, maintenance, and repair services; on-site services; preparation for drilling operations; well coordination and supply services based on the drilling programs; and integrated solutions for the subsea line pipe market comprising welding, coating, insulation, bending, logistics, project management, and service agreements. In addition, the company offers tubular products for geothermal; carbon capture, utilization, and storage; and hydrogen industries. Further, it provides tubes and hollow bars, as well as circular, square, rectangular, and octagonal sections for the manufacture of cranes, construction machinery, agricultural machinery, and hydraulic cylinders; and infrastructure construction, as well as axle tubes and gearbox applications for the automotive industry. Additionally, the company is involved in the iron ore and charcoal production businesses. It serves oil service, engineering, and construction companies; distributors and industrial equipment manufacturers; and energy companies, and carbon capture and storage specialists, as well as geothermal, green hydrogen, and solar developers. Vallourec S.A. was founded in 1895 and is based in Meudon, France.