Contrasting Pan American Silver (NYSE:PAAS) & Gatos Silver (NYSE:GATO)

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

Analyst Recommendations

This is a summary of current ratings for Gatos Silver and Pan American Silver, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gatos Silver	0	2	2	1	2.80
Pan American Silver	0	1	5	0	2.83

Gatos Silver currently has a consensus target price of $12.90, suggesting a potential downside of 30.16%. Pan American Silver has a consensus target price of $24.93, suggesting a potential upside of 2.12%. Given Pan American Silver’s stronger consensus rating and higher probable upside, analysts clearly believe Pan American Silver is more favorable than Gatos Silver.

Institutional & Insider Ownership

44.8% of Gatos Silver shares are owned by institutional investors. Comparatively, 55.4% of Pan American Silver shares are owned by institutional investors. 3.8% of Gatos Silver shares are owned by insiders. Comparatively, 12.9% of Pan American Silver shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Gatos Silver has a beta of 2.1, suggesting that its stock price is 110% more volatile than the S&P 500. Comparatively, Pan American Silver has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gatos Silver	N/A	7.41%	7.03%
Pan American Silver	-5.54%	0.66%	0.44%

Valuation & Earnings

This table compares Gatos Silver and Pan American 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	$0.22	83.95
Pan American Silver	$2.57 billion	3.44	-$103.70 million	($0.46)	-53.07

Gatos Silver has higher earnings, but lower revenue than Pan American Silver. Pan American 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 Pan American Silver on 8 of the 14 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 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.