Southern Copper vs Vale
Southern Copper vs Vale: this page compares business models, financial performance, and market context for the two companies. It outlines how each organisation approaches production, growth, and capital allocation, with attention to scale and geographic exposure. Educational content, not financial advice.
Southern Copper vs Vale: this page compares business models, financial performance, and market context for the two companies. It outlines how each organisation approaches production, growth, and capit...
Why It's Moving
Southern Copper Surges on Record Q3 Sales and Strong By-Product Growth Despite Copper Production Dip
- Q3 2025 net sales hit a record $3.38 billion, up 15.2% year-over-year, fueled by silver (+21.9%), molybdenum (+7.9%), and zinc (+7.3%) sales growth.
- Copper production fell 6.9% quarter-over-quarter to 234,892 tonnes, but zinc production displayed strong momentum with a 50.5% year-to-date increase due to the new Buenavista concentrator.
- Southern Copper increased its quarterly dividend to $0.90 per share, reflecting confidence in cash flow amid rising by-product contributions and continuous capital investments totaling nearly 30% of net income year-to-date.
Vale shares swing on copper plans, analyst upgrades, and dam liability concerns.
- Shares rose earlier in the week after Barclays and Wells Fargo lifted their price targets, while Vale announced a cooperative effort with Glencore Canada to explore copper potential, boosting sentiment around its base metals exposure.
- Vale highlighted strong capital discipline at its recent investor day, noting it delivered capex below guidance and freed up around $1 billion by selling a minority stake in its energy business, which it plans to reinvest in core mining operations.
- The stock reversed course sharply after Vale booked an additional $500 million provision related to the Fundao dam legal proceedings, reminding investors of the ongoing financial and reputational risks tied to the disaster.
Southern Copper Surges on Record Q3 Sales and Strong By-Product Growth Despite Copper Production Dip
- Q3 2025 net sales hit a record $3.38 billion, up 15.2% year-over-year, fueled by silver (+21.9%), molybdenum (+7.9%), and zinc (+7.3%) sales growth.
- Copper production fell 6.9% quarter-over-quarter to 234,892 tonnes, but zinc production displayed strong momentum with a 50.5% year-to-date increase due to the new Buenavista concentrator.
- Southern Copper increased its quarterly dividend to $0.90 per share, reflecting confidence in cash flow amid rising by-product contributions and continuous capital investments totaling nearly 30% of net income year-to-date.
Vale shares swing on copper plans, analyst upgrades, and dam liability concerns.
- Shares rose earlier in the week after Barclays and Wells Fargo lifted their price targets, while Vale announced a cooperative effort with Glencore Canada to explore copper potential, boosting sentiment around its base metals exposure.
- Vale highlighted strong capital discipline at its recent investor day, noting it delivered capex below guidance and freed up around $1 billion by selling a minority stake in its energy business, which it plans to reinvest in core mining operations.
- The stock reversed course sharply after Vale booked an additional $500 million provision related to the Fundao dam legal proceedings, reminding investors of the ongoing financial and reputational risks tied to the disaster.
Which Baskets Do They Appear In?
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Explore BasketWhich Baskets Do They Appear In?
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Explore BasketInvestment Analysis
Southern Copper
SCCO
Pros
- Southern Copper is one of the largest integrated copper producers globally with operations across multiple South American countries, providing geographic diversification.
- The company reports solid profitability with recent net income around $3.82 billion and positive cash flow generation.
- Southern Copper pays a stable dividend with a current yield near 2.3% and plans for increasing dividends in coming years.
Considerations
- Analyst consensus is predominantly 'Hold' with price targets implying a downside potential of approximately 14-16% over the next 12 months.
- The company has a relatively high valuation with forward P/E ratios near 26, which may limit upside during market downturns.
- Revenue concentration in copper exposes Southern Copper to commodity price volatility and geopolitical risks in Latin America.
Vale
VALE
Pros
- Vale has a diversified product portfolio including iron ore, nickel, copper, and other metals, mitigating risks from any single commodity.
- The company maintains strong EBITDA margins with recent figures around $10.5 billion, supporting solid operational cash flows.
- Vale is currently trading at an attractive valuation with a P/E ratio below 10, suggesting it is undervalued relative to sector peers.
Considerations
- The balance sheet shows a significant debt load of approximately $20.3 billion, which could increase risk in a rising interest rate environment.
- Exposure to cyclical industries like iron ore and nickel subjects Vale to macroeconomic fluctuations impacting demand and prices.
- Operational risks include environmental and regulatory challenges in Brazil, as well as competition from major global mining companies.
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