Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 6 Oct 2026
SCCO· Materials
Southern Copper
Southern Copper's top-quintile ROIC and margins are offset by a high P/E of 32.4, raising valuation concerns.
Buffett fit
Strong fit
Owner
88
Durability
90
Management
45
Price
17
Score updated 29 Oct 2026 · analysis from 6 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Materials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of Southern Copper, the focus would be on sustaining its top-quintile of 31.4% and leveraging its strong of 52.2%.
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The business has shown resilience with profitability in each of the last five years and a stable 5-year average of 27.1%.
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The management has maintained a stable share count with a CAGR of 0.31% over the past five years and a modest dividend yield of 1.9%.
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The current earnings yield of 3.08% and yield of 2.44% are below the ideal 8-10% range, indicating the stock is priced for growth.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
8- 1 of 31.4% is top-quintile in the Basic Materials sector.
- 2 of 52.2% is significantly above the sector's top-quintile cutoff of 21.7%.
- 3Net margin of 32.3% indicates strong profitability.
- 4Interest coverage ratio of 19.4 suggests solid financial health.
Concerns
8- 1 ratio of 32.4 suggests high market expectations.
- 2 yield of 2.44% is below the desired threshold.
- 3Market cap decrease vs retained earnings (-55.69) raises value creation concerns.
- 4No significant activity over the past 5 years.
Price history
$194+239.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Southern Copper Corporation is engaged in mining and refining copper and other minerals primarily in the Americas. The company generates revenue through the production and sale of copper, molybdenum, silver, and gold. With a of 53.6% and of 52.2%, it operates efficiently within the Basic Materials sector. The unit economics show a strong ability to convert revenue into profit, evidenced by a net margin of 32.3%.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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