When it comes to choosing between Teck Resources (TSX:TECK.B) and First Quantum Minerals (TSX:FM) on the TSX, it’s essential to consider recent performances, financial health, and future prospects. So today that’s just what we’ll do. Let’s delve into each to help you make an informed decision.
Into earnings
Teck Resources reported its third-quarter 2024 results on October 24, 2024, showcasing an adjusted profit of C$0.60 per share, surpassing analysts’ expectations of C$0.37 per share. This impressive performance was primarily driven by a significant increase in copper production at their Quebrada Blanca (QB) mine, which saw a 60% year-over-year rise to 115,000 metric tons. Additionally, the Canadian stock completed the sale of a 77% stake in its steelmaking coal unit to Glencore Plc, marking a strategic shift towards focusing on energy transition metals.
On the other hand, First Quantum Minerals reported its third-quarter 2024 results on October 22, 2024, with net earnings attributable to shareholders of $108 million, translating to $0.13 per share. This was a notable improvement compared to previous quarters, indicating a positive trend in their financial performance. However, it’s worth noting that the Canadian stock faced operational challenges, including a temporary suspension at its Kansanshi copper mine in Zambia due to a fatal accident.
Finances
Teck Resources boasts a robust financial position, with a market capitalization of approximately $31.5 billion as of September 30, 2024. The Canadian miner reported total cash holdings of $7.2 billion and a total debt of C$9.4 billion, resulting in a debt-to-equity ratio of 36.3%. Its current ratio stands at 2.9, indicating strong liquidity. Furthermore, Teck has been proactive in returning value to shareholders, distributing $720 million through dividends and share buybacks in the third quarter alone.
First Quantum Minerals, with a market capitalization of $15.6 billion as of September 30, 2024, reported total cash holdings of $783 million and a total debt of $7.9 billion, leading to a higher debt-to-equity ratio of 67.4%. The Canadian stock’s current ratio is 1.8, suggesting adequate liquidity but less cushion compared to Teck. Furthermore, First Quantum has been exploring strategic partnerships, including advanced talks with Saudi Arabia’s Manara Minerals to sell a minority stake in its Zambian copper and nickel assets, potentially bolstering its financial position.
Future outlook
Teck Resources is strategically positioning itself as a leader in energy transition metals, capitalizing on the growing demand for copper and other essential materials in renewable energy technologies. The successful divestment of its coal assets allows Teck to focus on expanding its copper production capabilities, aligning with global sustainability trends.
First Quantum Minerals is also poised to benefit from the increasing demand for copper, with significant operations in Zambia and ongoing projects aimed at boosting production. However, the company faces challenges, including operational disruptions and a higher debt load.
Bottom line
Both Teck Resources and First Quantum Minerals present compelling investment opportunities in the mining sector, particularly with the rising demand for copper driven by global energy transition initiatives. Teck’s strong financial health, strategic focus on energy transition metals, and consistent shareholder returns position it favourably. First Quantum’s growth potential is evident, but it faces higher leverage and operational challenges that warrant careful consideration.
As always, it’s advisable to conduct thorough research and consider your investment objectives and risk tolerance before making a decision. Consulting with a financial advisor can provide personalized insights tailored to your financial goals.