Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE:NEM) are both large-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Institutional and Insider Ownership

55.7% of Barrick Gold shares are held by institutional investors. Comparatively, 81.9% of Newmont Mining shares are held by institutional investors. 0.3% of Newmont Mining shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Barrick Gold and Newmont Mining’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Barrick Gold $8.56 billion 2.06 $655.00 million $1.87 8.09
Newmont Mining $6.71 billion 3.16 -$627.00 million $0.70 56.84

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Barrick Gold and Newmont Mining, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barrick Gold 1 11 2 0 2.07
Newmont Mining 1 5 7 0 2.46

Barrick Gold currently has a consensus target price of $18.45, indicating a potential upside of 22.02%. Newmont Mining has a consensus target price of $42.82, indicating a potential upside of 7.61%. Given Barrick Gold’s higher probable upside, research analysts plainly believe Barrick Gold is more favorable than Newmont Mining.

Volatility & Risk

Barrick Gold has a beta of -0.42, meaning that its share price is 142% less volatile than the S&P 500. Comparatively, Newmont Mining has a beta of 0.1, meaning that its share price is 90% less volatile than the S&P 500.

Dividends

Barrick Gold pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Newmont Mining pays an annual dividend of $0.30 per share and has a dividend yield of 0.8%. Barrick Gold pays out 6.4% of its earnings in the form of a dividend. Newmont Mining pays out 42.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Newmont Mining has increased its dividend for 2 consecutive years. Barrick Gold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Barrick Gold and Newmont Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barrick Gold 25.72% 7.73% 3.37%
Newmont Mining 1.18% 6.20% 3.55%

Summary

Newmont Mining beats Barrick Gold on 9 of the 17 factors compared between the two stocks.

About Barrick Gold

Barrick Gold Corporation (Barrick) is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company’s segments include Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero, Turquoise Ridge, Acacia Mining plc (Acacia), Pascua-Lama and Other Mines. Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines. The Company, through its subsidiary, Acacia, owns gold mines and exploration properties in Africa. It also holds interest in gold mines, including Porgera and Kalgoorlie, and copper mines, such as Zaldivar and Lumwana. The Pascua-Lama project is located on the border between Chile and Argentina. The Company has nine producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia and the Dominican Republic.

About Newmont Mining

Newmont Mining Corporation is a mining company, which is focused on the production of and exploration for gold and copper. The Company is primarily a gold producer with operations and/or assets in the United States, Australia, Peru, Ghana and Suriname. The Company’s segments include North America, South America, Asia Pacific and Africa. The Company’s North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in the state of Nevada, and Cripple Creek &Victor (CC&V) in the state of Colorado, in the United States. The Company’s South America segment consists primarily of Yanacocha in Peru and Merian in Suriname. The Company’s Asia Pacific segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Company’s Africa segment consists primarily of Ahafo and Akyem in Ghana. As of December 31, 2016, it had gold reserves of 68.5 million ounces and an aggregate land position of approximately 23,000 square miles (59,000 square kilometers).

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