Head-To-Head Analysis: Centerra Gold (NYSE:CGAU) vs. Pan American Silver (NYSE:PAAS)

Centerra Gold (NYSE:CGAU) and Pan American Silver (NYSE:PAAS) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and target prices for Centerra Gold and Pan American Silver, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centerra Gold	0	4	3	1	2.63
Pan American Silver	0	4	2	0	2.33

Centerra Gold presently has a consensus target price of $12.00, suggesting a potential upside of 85.04%. Pan American Silver has a consensus target price of $29.50, suggesting a potential upside of 29.88%. Given Centerra Gold’s stronger consensus rating and higher probable upside, analysts clearly believe Centerra Gold is more favorable than Pan American Silver.

Profitability

This table compares Centerra Gold and Pan American Silver’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Centerra Gold	6.62%	8.83%	6.61%
Pan American Silver	3.98%	6.14%	4.03%

Dividends

Centerra Gold pays an annual dividend of $0.19 per share and has a dividend yield of 2.9%. Pan American Silver pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Centerra Gold pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pan American Silver pays out 46.0% of its earnings in the form of a dividend. Pan American Silver has increased its dividend for 2 consecutive years.

Institutional and Insider Ownership

55.4% of Centerra Gold shares are owned by institutional investors. Comparatively, 55.4% of Pan American Silver shares are owned by institutional investors. 0.2% of Centerra Gold shares are owned by insiders. Comparatively, 12.9% of Pan American Silver shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Centerra Gold has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500. Comparatively, Pan American Silver has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Valuation & Earnings

This table compares Centerra Gold and Pan American Silver”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centerra Gold	$1.21 billion	1.13	-$81.28 million	$0.19	34.13
Pan American Silver	$2.99 billion	2.75	-$103.70 million	$0.87	26.11

Centerra Gold has higher earnings, but lower revenue than Pan American Silver. Pan American Silver is trading at a lower price-to-earnings ratio than Centerra Gold, indicating that it is currently the more affordable of the two stocks.

Summary

Centerra Gold beats Pan American Silver on 10 of the 18 factors compared between the two stocks.

About Centerra Gold

Centerra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects are the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt gold mine located in Turkey. The company was incorporated in 2002 and is based in Toronto, Canada.

About Pan American Silver

Pan American Silver Corp. engages in the exploration, mine development, extraction, processing, refining, and reclamation of silver, gold, zinc, lead, and copper mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil. The company was formerly known as Pan American Minerals Corp. and changed its name to Pan American Silver Corp. in April 1995. Pan American Silver Corp. was incorporated in 1979 and is headquartered in Vancouver, Canada.