Head to Head Contrast: Vale (NYSE:VALE) & Kinross Gold (NYSE:KGC)

Vale (NYSE:VALE) and Kinross Gold (NYSE:KGC) are both large-cap materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Institutional and Insider Ownership

21.9% of Vale shares are owned by institutional investors. Comparatively, 63.7% of Kinross Gold shares are owned by institutional investors. 1.0% of Kinross Gold shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Vale and Kinross Gold, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vale	1	10	3	0	2.14
Kinross Gold	0	2	14	1	2.94

Vale presently has a consensus price target of $14.96, indicating a potential upside of 29.02%. Kinross Gold has a consensus price target of $37.98, indicating a potential upside of 71.02%. Given Kinross Gold’s stronger consensus rating and higher probable upside, analysts plainly believe Kinross Gold is more favorable than Vale.

Valuation and Earnings

This table compares Vale and Kinross Gold”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vale	$41.41 billion	1.27	$2.35 billion	$0.15	77.29
Kinross Gold	$7.05 billion	3.71	$2.39 billion	$2.65	8.38

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

Dividends

Vale pays an annual dividend of $0.44 per share and has a dividend yield of 3.8%. Kinross Gold pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. Vale pays out 293.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinross Gold pays out 6.0% of its earnings in the form of a dividend.

Volatility and Risk

Vale has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500. Comparatively, Kinross Gold has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Profitability

This table compares Vale and Kinross Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vale	1.64%	16.54%	7.02%
Kinross Gold	37.62%	32.84%	23.49%

Summary

Kinross Gold beats Vale on 14 of the 17 factors compared between the two stocks.

About Vale

Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments. The Iron Solutions segment produces and extracts iron ore and pellets, manganese, and other ferrous products; and provides related logistic services. The Energy Transition Materials segment produces and extracts nickel used to produce stainless steel, electric vehicles, and metal alloys; and its by-products, such as gold, silver, cobalt, precious metals, platinum, and others, as well as copper used in the construction sector to produce pipes and electrical wires. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.

About Kinross Gold

Kinross Gold Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of gold properties principally in the United States, Brazil, Chile, Canada, and Mauritania. The company operates the Fort Knox mine and the Manh Choh project in Alaska, as well as the Round Mountain and the Bald Mountain mines in Nevada, the United States; the Paracatu mine in Brazil; the La Coipa and the Lobo-Marte project in Chile; the Tasiast mine in Mauritania; and the Great Bear project in Canada. It is also involved in the extraction and processing of gold-containing ores; reclamation of gold mining properties; and production and sale of silver. Kinross Gold Corporation was founded in 1993 and is headquartered in Toronto, Canada.