Financial Analysis: Solgold (OTCMKTS:SLGGF) and Iamgold (NYSE:IAG)

Solgold (OTCMKTS:SLGGF) and Iamgold (NYSE:IAG) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Volatility & Risk

Solgold has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, Iamgold has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Profitability

This table compares Solgold and Iamgold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Solgold	N/A	-26.92%	-12.63%
Iamgold	29.49%	26.65%	18.54%

Insider & Institutional Ownership

47.1% of Iamgold shares are held by institutional investors. 0.2% of Iamgold shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Solgold and Iamgold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Solgold	0	0	0	0	0.00
Iamgold	0	3	5	1	2.78

Iamgold has a consensus target price of $17.75, suggesting a potential upside of 15.15%. Given Iamgold’s stronger consensus rating and higher possible upside, analysts plainly believe Iamgold is more favorable than Solgold.

Earnings & Valuation

This table compares Solgold and Iamgold”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Solgold	N/A	N/A	-$36.25 million	($0.01)	-37.40
Iamgold	$2.85 billion	3.12	$664.40 million	$1.72	8.96

Iamgold has higher revenue and earnings than Solgold. Solgold is trading at a lower price-to-earnings ratio than Iamgold, indicating that it is currently the more affordable of the two stocks.

Summary

Iamgold beats Solgold on 14 of the 14 factors compared between the two stocks.

About Solgold

SolGold Plc, a mineral exploration and development company, explores for and develops mineral properties in Ecuador, Australia, Chile, and Solomon Islands. The company primarily explores for copper, gold, silver, and molybdenum deposits. Its flagship project is the Cascabel Project that covers an area of approximately 50 square kilometers located in Imbabura province, Northern Ecuador. The company was formerly known as Solomon Gold plc and changed its name to SolGold plc in May 2012. SolGold Plc was incorporated in 2005 and is headquartered in Brisbane, Australia.

About Iamgold

IAMGOLD Corporation, through its subsidiaries, operates as an intermediate gold producer and developer in Canada and Burkina Faso. It owns 100% interest in the Westwood project that covers an area of 1,925 hectare and located in Quebec; a 60% interest in the Côté gold project, which covers an area of 596 square kilometer located in Ontario, Canada; and a 90% interests in the Essakane project that covers an area of 274,000 square kilometer situated in Burkina Faso. IAMGOLD Corporation was incorporated in 1990 and is headquartered in Toronto, Canada.