Hudbay Minerals Inc. (NYSE: HBM)

Sector: Basic Materials Industry: Copper CIK: 0001322422
Market Cap 10.18 Bn
P/B 3.30
P/E 21.72
P/S 4.93
ROIC (Qtr) 12.67
Div Yield % 0.04
Rev 1y % (Qtr) -28.61
Total Debt (Qtr) 1.34 Bn
Debt/Equity (Qtr) 0.43
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About

Investment thesis

Bull case

  • Strong operating cash flow of 740.06M provides robust 0.55x coverage of total debt 1.34B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 740.06M provides exceptional 121.82x coverage of minority interest expenses 6.08M, showing strong core operations.
  • Operating cash flow of 740.06M provides exceptional 11.04x coverage of interest expenses 67.02M, showing strong debt service capability.
  • Operating cash flow of 740.06M provides strong 20.41x coverage of stock compensation 36.26M, indicating sustainable incentive practices.
  • Strong operating cash flow of 740.06M provides 9.77x coverage of SG&A expenses 75.74M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 740.06M barely covers its investment activities of (383.74M), with a coverage ratio of -1.93, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 740.06M provides thin coverage of dividend payments of (5.61M) with a -131.87 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (383.74M) provide weak support for R&D spending of 45.62M, which is -8.41x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 611.10M provide limited coverage of acquisition spending of (2.26M), which is -270.76x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 838.72M show weak coverage of depreciation charges of 410.63M, with a 2.04 ratio indicating high capital intensity and potential reinvestment needs.

Markets of customers Breakdown of Revenue (2024)

Segments [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Copper
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SCCO Southern Copper Corp/ 156.08 Bn 124.92 27.85 7.43 Bn
2 FCX Freeport-Mcmoran Inc 50.61 Bn 20.03 3.37 10.39 Bn
3 HBM Hudbay Minerals Inc. 10.18 Bn 21.72 4.93 1.34 Bn
4 ERO Ero Copper Corp. 3.10 Bn 22.50 5.27 0.64 Bn
5 TGB Taseko Mines Ltd 2.34 Bn -57.89 5.41 0.72 Bn
6 IE Ivanhoe Electric Inc. -2.08 Bn 37.85 -565.48 0.07 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.84 1.43
EV to Cash from Ops. EV/CFO 14.72 34.72
EV to Debt EV to Debt 8.14 2.63
EV to EBIT EV/EBIT 12.99 18.51
EV to EBITDA EV/EBITDA 8.91 27.03
EV to Free Cash Flow [EV/FCF] EV/FCF 34.07 -172.92
EV to Market Cap EV to Market Cap 1.07 1.07
EV to Revenue EV/Rev 5.28 -86.78
Price to Book Value [P/B] P/B 3.30 6.28
Price to Earnings [P/E] P/E 21.72 28.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 83.52 14.62
Dividend Payout Ratio % Div Payout % (Qtr) 0.60 15.85
Dividend per Basic Share Div per Share (Qtr) 0.01 0.58
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.87 20.37
Interest Coverage Int. cover (Qtr) 12.52 4.49
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -26.94 3.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 37.86 37.61
Dividend Growth (1y) % Div 1y % (Qtr) -65.00 -4.72
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 335.80 116.37
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 49.12 18.35
EBIT Growth (1y) % EBIT 1y % (Qtr) 164.78 78.94
EBT Growth (1y) % EBT 1y % (Qtr) 231.56 127.40
EPS Growth (1y) % EPS 1y % (Qtr) 364.00 119.98
FCF Growth (1y) % FCF 1y % (Qtr) -1.89 -64.06
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.15 14.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.35 0.32
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.08
Cash Ratio Cash Ratio (Qtr) 0.59 0.91
Current Ratio Curr Ratio (Qtr) 0.97 1.83
Debt to Equity Ratio Debt/Equity (Qtr) 0.43 0.75
Interest Cover Ratio Int Coverage (Qtr) 12.52 4.49
Times Interest Earned Times Interest Earned (Qtr) 12.52 4.49
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 60.60 -178.60
EBIT Margin % EBIT Margin % (Qtr) 40.66 -204.60
EBT Margin % EBT Margin % (Qtr) 37.41 -228.80
Gross Margin % Gross Margin % (Qtr) 31.90 39.38
Net Profit Margin % Net Margin % (Qtr) 22.70 -236.28