SCCO Stock Overview
Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile.
Southern Copper Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$48.63|
|52 Week High||US$79.32|
|52 Week Low||US$42.42|
|1 Month Change||6.44%|
|3 Month Change||-5.09%|
|1 Year Change||-13.47%|
|3 Year Change||49.95%|
|5 Year Change||16.54%|
|Change since IPO||1,709.49%|
Recent News & Updates
Southern Copper: A Weak Copper Outlook Is Not Helping
Summary Southern Copper's earnings per diluted share were $0.56 per share, and revenues were $2.307 billion. A weak production quarter due to the 53-day disruption in the Cuajone mine in Peru. Copper Production for 2Q22 was 459.5 Cu M lbs and 520.5 Cu M lbs, including third party (sold 430.8 M lbs), down 12.1% from the same quarter a year ago. I recommend buying SCCO at or below $44.5 with potential lower support at $43.6. Introduction The Phoenix-based Southern Copper Corporation (NYSE:SCCO) is a majority-owned, indirect subsidiary of Grupo Mexico SAB de CV (OTCPK:GMBXF). As of June 30, 2022, Grupo Mexico, through its wholly-owned subsidiary Americas Mining Corp ("AMC"), owns 88.91% of its capital stock. SCCO Diagram Presentation (SCCO Presentation) The company is an integrated producer of copper, representing about 80% of the revenue, and other metals (mainly molybdenum, silver, and zinc). Note: This article is an update of my article published on July 24, 2022. I have followed SCCO on Seeking Alpha since January 2021. The company operates mining, smelting, and refining facilities in Peru and Mexico (See picture below). Southern Copper also conducts exploration activities in Argentina, Chile, and Ecuador. From the most recent company's presentation. SCCO Presentation (Southern Copper) 1 - Summary On July 26, 2022, SCCO reported second-quarter 2022 earnings of $0.56 per share on a net sale of $2,306.9 million, missing analysts' expectations. Revenues were down 20.4% from the prior-year quarter. The quarterly results were affected by a 25,624-tonne decrease in copper production at the company's Peruvian operations (stoppage at Cuajone and lower ore grades) and a decline in ore grades at both Toquepala and La Caridad operations. The copper production losses were temporarily offset with purchases from third parties, albeit at a higher cost, to avoid a force majeure event. Molybdenum production fell 9.7% compared to 2Q21; silver dropped 4.4%, and Copper 12.1%. Cash flow from operating activities in 2Q22 was $309.9 million, representing a decrease of 70.8% over the $1,061.5 million posted in 2Q21. An essential element to consider: Southern Copper owns the world's largest copper reserves at 42.4 MMT. SCCO Copper reserves (Southern Copper) 2 - Stock performance Southern Copper is the second copper company I am covering at Seeking Alpha after Freeport-McMoRan (FCX). Both companies have dropped significantly since April due to a significant drop in the copper price and lingering fear of recession due to the Fed's action. Data by YCharts SCCO has underperformed Freeport-McMoRan and the Global X Copper Miners ETF (COPX), with a loss of 20% in one year. 3 - Investment Thesis My two reliable stocks in the copper sector are Freeport-McMoRan and Southern Copper. I consider these two companies very solid in terms of balance sheets which pay generous dividends despite a weakening copper price. The outlook for copper is uncertain at the moment, and the copper price has dropped significantly in the past few months with no real catalyst in the near term. 1-Year copper price chart (Kitco.com) Decades-high inflation has pushed the Fed to turn very hawkish, ultimately pushing the world economy into recession. The Fed is expected to hike interest by 75-point for the third time on September 22. The Chairman of the Board, German Larrea, said in the press release: We believe the economic slowdowns in the U.S., China and Europe have temporarily weakened the demand for copper and are driving reductions in current prices. It is important to emphasize that copper plays a leading role in the global shift to clean energy, which correlates positively with our assertion that the underlying demand for copper will be strong in the long-term. One major issue for Southern Copper is its presence in Peru and principally the 54-day disruption it experienced with the Cuajone mines, which were partially resolved on May 3, 2022. Also, the ore grades decreased sharply at both Toquepala and La Caridad mines. The company expects the disruption at Cuajone to drag down annual copper production to 922,000 tons. Output is set to recover to 971,000 tons next year, Southern Copper Chief Financial Officer Raul Jacob said Tuesday on a call with analysts. Finally, I noticed increasing inflationary pressures that could reduce the future free cash flow. Thus, I believe long-term investors should continue accumulating this highly cyclical stock on any significant weakness. But, due to extreme volatility in the copper demand, I recommend short-term trading LIFO. About 30% to 40% should be allocated for this task to minimize the risks of a sudden severe retracement. Southern Copper - 2Q22 - Balance Sheet and Trend - The Raw Numbers Southern Copper 2Q21 3Q21 4Q21 1Q22 2Q22 Total Revenues in $ Million 2,897.0 2,680.9 2,823.7 2,763.8 2,306.9 Net income in $ Million 932.7 867.6 832.9 784.7 432.3 EBITDA $ Million 1,863.7 1,710.8 1,728.5 1,683.0 1,025.7 EPS diluted in $/share 1.21 1.12 1.08 1.02 0.56 Cash from Operations in $ Million 1,061.5 1,220.6 1,227.7 820.7 309.9 Capital Expenditure in $ Million 219.8 243.1 196.8 205.2 224.6 Free Cash Flow in $ Million 841.7 977.5 1,030.9 615.5 85.3 Total cash $ Million 2,940.1 3,210.5 3,488.9 3,253.7 2,355.7 Total Long term Debt in $ Million 6.545.9 6,546.7 6,547.6 6,548.5 6.549.4 Dividend $/sh 0.90 1.00 1.00 1.25 0.75 Shares outstanding (diluted) in Million 773.1 773.1 773.1 773.1 773.1 Source: Southern Copper release Note: More data (production) is available for subscribers. Analysis: Revenues, Free Cash Flow, and Copper/Silver/Molybdenum Production 1 - Revenues were $2,306.9 million for the second quarter of 2022 SCCO Quarterly Revenues history (Fun Trading) Southern Copper's earnings per diluted share were $0.56 per share, and revenues were $2.307 billion. 2Q22 net income was $432.3 million, representing a 53.7% decrease compared to the $932.7 million in 2Q21. The adjusted EBITDA dropped 45.2% year over year to $1,021.4 million in the second quarter of 2022. The adjusted EBITDA margin in 2Q22 stood at 44.3% versus 64.3% in 2Q21 2 - Free cash flow was $85.3 million in the second quarter of 2022 SCCO Quarterly Free cash flow history (Fun Trading) Note: I calculate the generic free cash flow using the cash from operating activities minus CapEx. Trailing 12-month free cash flow was $2,709.2 million, with $85.3 million in 2Q22. The company declared a quarterly dividend of $0.75 per share in 2Q22, or a yield of 6.10%, supported by the free cash flow generation. 3 - Net debt was $4.19 billion on June 30, 2022 SCCO Quarterly Cash versus Debt history (Fun Trading) On June 30, 2022, SCCO had $2.36 billion in consolidated cash and long-term debt of $6.55 billion. The net debt to EBITDA is now 0.7x, which is good. 4 - Production analysis - Copper-Cu, Silver-Ag, and Molybdenum-Mo. Note: The weight in metric tons is equal to 2,205 pounds Price 2Q21 3Q21 4Q21 1Q22 2Q22 Copper price realized - Cu (Comex) $/Lbs 4.40 4.25 4.40 4.53 4.32 Silver price Realized - Ag $/oz 26.78 24.28 23.36 24.05 22.65 Molybdenum price realized - Mo $/Lbs 13.89 18.43 18.53 18.99 18.30 Zinc price $/Lbs 1.32 1.36 1.53 1.70 1.78 Gold $/oz 1,816 1,789 1,795 1,874 1,872
Is Southern Copper Corporation (NYSE:SCCO) Trading At A 39% Discount?
In this article we are going to estimate the intrinsic value of Southern Copper Corporation ( NYSE:SCCO ) by taking the...
Southern Copper goes ex dividend tomorrow
Southern Copper (NYSE:SCCO) has declared $0.75/share quarterly dividend, -40% decrease from prior dividend of $1.25. Payable Aug. 25; for shareholders of record Aug. 11; ex-div Aug. 10. See SCCO Dividend Scorecard, Yield Chart, & Dividend Growth.
|SCCO||US Metals and Mining||US Market|
Return vs Industry: SCCO underperformed the US Metals and Mining industry which returned -6.2% over the past year.
Return vs Market: SCCO exceeded the US Market which returned -18.2% over the past year.
|SCCO Average Weekly Movement||5.6%|
|Metals and Mining Industry Average Movement||8.9%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.5%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: SCCO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: SCCO's weekly volatility (6%) has been stable over the past year.
About the Company
|1952||14,700||Oscar Gonzalez Rocha||https://www.southernperu.com|
Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant in Mexico.
Southern Copper Fundamentals Summary
|SCCO fundamental statistics|
Is SCCO overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|SCCO income statement (TTM)|
|Cost of Revenue||US$4.16b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||3.77|
|Net Profit Margin||27.59%|
How did SCCO perform over the long term?See historical performance and comparison
6.2%Current Dividend Yield
Is SCCO undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for SCCO?
Other financial metrics that can be useful for relative valuation.
|What is SCCO's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does SCCO's PE Ratio compare to its peers?
|SCCO PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
AEM Agnico Eagle Mines
SCCO Southern Copper
Price-To-Earnings vs Peers: SCCO is good value based on its Price-To-Earnings Ratio (12.9x) compared to the peer average (23.4x).
Price to Earnings Ratio vs Industry
How does SCCO's PE Ratio compare vs other companies in the US Metals and Mining Industry?
Price-To-Earnings vs Industry: SCCO is expensive based on its Price-To-Earnings Ratio (12.9x) compared to the US Metals and Mining industry average (6.8x)
Price to Earnings Ratio vs Fair Ratio
What is SCCO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||12.9x|
|Fair PE Ratio||18.2x|
Price-To-Earnings vs Fair Ratio: SCCO is good value based on its Price-To-Earnings Ratio (12.9x) compared to the estimated Fair Price-To-Earnings Ratio (18.2x).
Share Price vs Fair Value
What is the Fair Price of SCCO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: SCCO ($48.63) is trading below our estimate of fair value ($76.01)
Significantly Below Fair Value: SCCO is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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How is Southern Copper forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: SCCO's forecast earnings growth (3.6% per year) is above the savings rate (1.9%).
Earnings vs Market: SCCO's earnings (3.6% per year) are forecast to grow slower than the US market (14.8% per year).
High Growth Earnings: SCCO's earnings are forecast to grow, but not significantly.
Revenue vs Market: SCCO's revenue (3.4% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: SCCO's revenue (3.4% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: SCCO's Return on Equity is forecast to be high in 3 years time (32.5%)
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How has Southern Copper performed over the past 5 years?
Past Performance Score3/6
Past Performance Score 3/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: SCCO has high quality earnings.
Growing Profit Margin: SCCO's current net profit margins (27.6%) are lower than last year (28.2%).
Past Earnings Growth Analysis
Earnings Trend: SCCO's earnings have grown significantly by 27.7% per year over the past 5 years.
Accelerating Growth: SCCO's earnings growth over the past year (4.5%) is below its 5-year average (27.7% per year).
Earnings vs Industry: SCCO earnings growth over the past year (4.5%) underperformed the Metals and Mining industry 82.4%.
Return on Equity
High ROE: SCCO's Return on Equity (38.1%) is considered high.
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How is Southern Copper's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: SCCO's short term assets ($5.0B) exceed its short term liabilities ($1.5B).
Long Term Liabilities: SCCO's short term assets ($5.0B) do not cover its long term liabilities ($7.9B).
Debt to Equity History and Analysis
Debt Level: SCCO's net debt to equity ratio (54.6%) is considered high.
Reducing Debt: SCCO's debt to equity ratio has reduced from 94% to 85.2% over the past 5 years.
Debt Coverage: SCCO's debt is well covered by operating cash flow (54.6%).
Interest Coverage: SCCO's interest payments on its debt are well covered by EBIT (15.7x coverage).
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What is Southern Copper current dividend yield, its reliability and sustainability?
Dividend Score 4/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|Southern Copper Dividend Yield vs Market|
|Company (Southern Copper)||6.2%|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.5%|
|Industry Average (Metals and Mining)||3.3%|
|Analyst forecast in 3 Years (Southern Copper)||6.4%|
Notable Dividend: SCCO's dividend (6.17%) is higher than the bottom 25% of dividend payers in the US market (1.6%).
High Dividend: SCCO's dividend (6.17%) is in the top 25% of dividend payers in the US market (4.53%)
Stability and Growth of Payments
Stable Dividend: SCCO's dividend payments have been volatile in the past 10 years.
Growing Dividend: SCCO's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its high payout ratio (110%), SCCO's dividend payments are not well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: At its current cash payout ratio (85.6%), SCCO's dividend payments are covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Oscar Gonzalez Rocha (84 yo)
Mr. Oscar Gonzalez Rocha serves as an Executive President of Americas Mining Corporation - Mining Division at Grupo México S.A.B. de C.V. He has been the Chief Executive Officer and President of Southern C...
CEO Compensation Analysis
|Oscar Gonzalez Rocha's Compensation vs Southern Copper Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$1m||US$421k|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$1m||US$468k|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$2m||US$490k|
|Sep 30 2019||n/a||n/a|
|Jun 30 2019||n/a||n/a|
|Mar 31 2019||n/a||n/a|
|Dec 31 2018||US$2m||US$490k|
|Sep 30 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$1m||US$487k|
|Sep 30 2017||n/a||n/a|
|Jun 30 2017||n/a||n/a|
|Mar 31 2017||n/a||n/a|
|Dec 31 2016||US$1m||US$472k|
|Sep 30 2016||n/a||n/a|
|Jun 30 2016||n/a||n/a|
|Mar 31 2016||n/a||n/a|
|Dec 31 2015||US$2m||US$499k|
Compensation vs Market: Oscar's total compensation ($USD1.46M) is below average for companies of similar size in the US market ($USD13.00M).
Compensation vs Earnings: Oscar's compensation has been consistent with company performance over the past year.
Experienced Management: SCCO's management team is seasoned and experienced (9.4 years average tenure).
Experienced Board: SCCO's board of directors are seasoned and experienced ( 18.7 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|11 Mar 22||SellUS$14,987,600||German Larrea Mota-Velasco||Individual||200,000||US$74.94|
|10 Mar 22||SellUS$7,497,300||German Larrea Mota-Velasco||Individual||100,000||US$74.97|
|09 Mar 22||SellUS$3,743,350||German Larrea Mota-Velasco||Individual||50,000||US$74.87|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||47,688||0.006%|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Southern Copper Corporation's employee growth, exchange listings and data sources
- Name: Southern Copper Corporation
- Ticker: SCCO
- Exchange: NYSE
- Founded: 1952
- Industry: Copper
- Sector: Materials
- Implied Market Cap: US$37.595b
- Shares outstanding: 773.09m
- Website: https://www.southernperu.com
Number of Employees
- Southern Copper Corporation
- 1440 East Missouri Avenue
- Suite 160
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|PCU||DUSE (Dusseldorf Stock Exchange)||Yes||Common Stock||DE||EUR||Jan 1996|
|SCCO||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Jan 1996|
|SCCO||BVL (Bolsa de Valores de Lima)||Yes||Common Stock||PE||USD||Jan 1996|
|PCU||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Jan 1996|
|SCCO *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Jan 1996|
|0L8B||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||Jan 1996|
|SCCO||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH REP 0.5 ORD SHS||AR||ARS||Mar 2012|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/05 00:00|
|End of Day Share Price||2022/10/05 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.