BHP Billiton PLC (NYSE: BBL) and A-Mark Precious Metals (NASDAQ:AMRK) are both integrated mining companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Profitability

This table compares BHP Billiton PLC and A-Mark Precious Metals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BHP Billiton PLC N/A N/A N/A
A-Mark Precious Metals 0.10% 9.95% 1.40%

Dividends

BHP Billiton PLC pays an annual dividend of $1.66 per share and has a dividend yield of 4.4%. A-Mark Precious Metals pays an annual dividend of $0.32 per share and has a dividend yield of 2.1%. BHP Billiton PLC pays out 75.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. A-Mark Precious Metals pays out 28.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and recommmendations for BHP Billiton PLC and A-Mark Precious Metals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BHP Billiton PLC 1 1 1 0 2.00
A-Mark Precious Metals 0 1 1 1 3.00

BHP Billiton PLC currently has a consensus target price of $38.00, suggesting a potential upside of 1.69%. A-Mark Precious Metals has a consensus target price of $21.65, suggesting a potential upside of 42.34%. Given A-Mark Precious Metals’ stronger consensus rating and higher probable upside, analysts clearly believe A-Mark Precious Metals is more favorable than BHP Billiton PLC.

Earnings and Valuation

This table compares BHP Billiton PLC and A-Mark Precious Metals’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
BHP Billiton PLC $38.29 billion 1.03 $5.89 billion $2.21 16.91
A-Mark Precious Metals $6.99 billion 0.02 $7.08 million $1.14 13.34

BHP Billiton PLC has higher revenue and earnings than A-Mark Precious Metals. A-Mark Precious Metals is trading at a lower price-to-earnings ratio than BHP Billiton PLC, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

4.3% of BHP Billiton PLC shares are owned by institutional investors. Comparatively, 19.9% of A-Mark Precious Metals shares are owned by institutional investors. 38.8% of A-Mark Precious Metals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

BHP Billiton PLC has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, A-Mark Precious Metals has a beta of 0.05, indicating that its stock price is 95% less volatile than the S&P 500.

Summary

A-Mark Precious Metals beats BHP Billiton PLC on 9 of the 15 factors compared between the two stocks.

About BHP Billiton PLC

BHP Billiton Plc is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. It extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. It manages product distribution through its global logistics chain, including freight and pipeline transportation. It sells its products through direct supply agreements with its customers and on global commodity exchanges.

About A-Mark Precious Metals

A-Mark Precious Metals, Inc. is a precious metal trading company. The Company is a wholesaler of gold, silver, platinum and palladium bullion and related products, including bars, wafers, grain and coins. It distributes gold and silver coins and bars from sovereign and private mints; provides financing for the purchase of bullion and numismatics; offers storage for bullion, and offers complementary products, such as consignment, customized finance and liquidity programs, such as repurchase (Repo) accounts, and trade quotes in a variety of foreign currencies. It operates through various business units for accounting purposes, including Industrial, Coin and Bar, Trading, Finance, Collateral Finance Corporation, Transcontinental Depository Services and Logistics. It is an authorized distributor of gold and silver coins for sovereign mints and various private mints. The sovereign mints include the United States Mint, the Australian (Perth) Mint and the Austrian Mint, among others.

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