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Comparable Companies
Comparable Companies
Sumedh Wargantiwar
You can value a company based on how similar companies trade in the public
markets
The first step is to pick the comp universe (size depends on relevance)
Market Multiples and Market Transactions
Method 1
Market Multiples compare common ratios between firms.
Method 2
Market Transactions.
Industries
Business Models
Profitability
Size
Growth
Geography (International vs. Domestic)
Sources include:
Industry: Mining
Summary
EBITDA
Price Shares (M) EPS (M) Market Cap (B) EV(M)
First Quantum Minerals (FM.TO) 16.08 600.51 1.04 1140 9.66 15670
Silver Wheaton Corp. (SLW.TO) 23.75 404.1 0.47 404.45 7.71 8370
Lundin Mining Corporation
(LUN.TO) 5.63 718.45 0.27 485.89 4.04 4750
Nevsun Resources (NSU.TO) 5.16 199.66 0.45 315.05 1.03 589.58
Teck Resources Ltd (TCK-B.TO) 566.86 0.63 1910
Summary
EBITDA EV/EBIT
Price EPS P/E (M) EV(M) DA
First Quantum Minerals
(FM.TO) 16.08 1.04 15.46 1140 15670 13.75
Silver Wheaton Corp. (SLW.TO) 23.75 0.47 50.53 404.45 8370 20.69
Lundin Mining Corporation
(LUN.TO) 5.63 0.27 20.85 485.89 4750 9.78
Nevsun Resources (NSU.TO) 5.16 0.45 11.47 315.05 589.58 1.87
Example: Teck Resources IV
Average the Data
Summary
EBITDA EV/EBITD
Price EPS P/E (M) EV(M) A
First Quantum Minerals (FM.TO) 16.08 1.04 15.46 1140 15670 13.75
Silver Wheaton Corp. (SLW.TO) 23.75 0.47 50.53 404.45 8370 20.69
Lundin Mining Corporation
(LUN.TO) 5.63 0.27 20.85 485.89 4750 9.78
Nevsun Resources (NSU.TO) 5.16 0.45 11.47 315.05 589.58 1.87
Market Cap
Price Shares (M) EPS EBITDA (M) (B) EV(M)
Teck Resources Ltd (TCK-B.TO) 566.86 0.63 1910
P = 8128.4/566.86 = 14.34