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What are we looking for?

Analyzing characteristics of large-cap Canadian metals and mining companies, with hopes of additional returns in an already profitable sector.

The screen

The S&P/TSX materials sector has seen price returns of more than 52 per cent year to date, driven largely to its metals and mining component, which has seen returns in excess of 84 per cent over this same time frame.

Today's screen takes a deeper look into the Canadian large-cap metals and mining industry (as defined by a market capitalization of more than $5-billion) and examines various valuation and fundamental characteristics.

The screen is ranked according to the StarMine Combined Alpha Model, which ranks the companies against industry peers according to other StarMine models that measure characteristics such as revision scores, valuation and momentum components and ownership and credit breakdowns.

Three other metrics have also been provided: the Relative Valuation Industry Rank, measuring the stock based on price and enterprise value multiples; the Analyst Revisions Model, which measures overall changes in analyst sentiment, and the Credit Combined Industry Rank, which gauges the overall credit risk of the company.

More about Thomson Reuters

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What did we find?

Canada's 11 largest metals and mining companies make the screen, and not surprisingly, all have seen exceptional year-to-date price performance, with Teck Resources Ltd. standing out among the crowd at 313.7 per cent. Teck has seen strong performance due in part to its strong correlation with rising commodity prices.

Kinross Gold Corp. tops the screen results in two of the four StarMine models presented, with a lower score in credit valuation being one blip on its radar. Barrick Gold Corp., the largest metals and mining company in Canada, saw equally as impressive results and, similar to its peers on the list, should see steady price appreciation through the end of 2016 – so long as the Chinese economy and corresponding metals demand do not continue to slow.

This commentary does not provide individualized advice or recommendations for any specific subscriber or portfolio. Investors should conduct further research before investing.

Ryan Gottschalk works in the financial and risk unit of Thomson Reuters and specializes in asset management.

Large-cap Canadian metals and mining stocks

CompanyTickerMarket Cap ($-mil)$ PriceCombined Alpha Model Industry Rank *Relative Valuation Industry RankAnalyst Revisions ModelCredit Combined Industry RankYTD Price % ChangeDividend Yield %
Kinross Gold Corp.K-T7,1455.7486809539128.7%n/a
Barrick Gold Corp.ABX-T27,49023.5984369839130.4%0.4%
First Quantum Minerals Ltd.FM-T7,00410.168446971096.1%0.1%
Yamana Gold Inc.YRI-T5,6285.9484539729131.1%0.4%
Teck Resources Ltd.TCK.B-T12,73322.0964478013313.7%0.5%
Goldcorp Inc.G-T17,77620.835753825030.3%0.5%
Silver Wheaton Corp.SLW-T15,70235.6741149865107.4%0.7%
Detour Gold Corp.DGC-T5,48331.3541258874117.6%n/a
Agnico Eagle Mines Ltd.AEM-T15,65869.733621777791.7%0.8%
Franco Nevada Corp.FNV-T17,11396.272712919952.1%1.2%
Turquoise Hill Resources Ltd.TRQ-T8,2304.09615497616.5%n/a

Source: Thomson Reuters Eikon

All StarMine rankings are out of 100