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

Insider and Institutional Ownership

34.7% of Gold Fields shares are owned by institutional investors. Comparatively, 82.6% of Newmont Mining shares are owned by institutional investors. 0.4% of Newmont Mining 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 & Risk

Gold Fields has a beta of -1.32, suggesting that its stock price is 232% less volatile than the S&P 500. Comparatively, Newmont Mining has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Gold Fields and Newmont Mining, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gold Fields 0 3 5 0 2.63
Newmont Mining 1 6 5 0 2.33

Gold Fields currently has a consensus price target of $5.10, suggesting a potential upside of 109.15%. Newmont Mining has a consensus price target of $42.55, suggesting a potential upside of 41.91%. Given Gold Fields’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Gold Fields is more favorable than Newmont Mining.

Dividends

Gold Fields pays an annual dividend of $0.02 per share and has a dividend yield of 0.8%. Newmont Mining pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. Gold Fields pays out 8.3% of its earnings in the form of a dividend. Newmont Mining pays out 38.4% 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. Gold Fields has raised its dividend for 2 consecutive years and Newmont Mining has raised its dividend for 2 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Gold Fields N/A N/A N/A
Newmont Mining 2.23% 6.17% 3.53%

Valuation and Earnings

This table compares Gold Fields and Newmont Mining’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gold Fields $2.76 billion 0.72 -$18.70 million $0.24 10.17
Newmont Mining $7.35 billion 2.18 -$98.00 million $1.46 20.53

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

Summary

Newmont Mining beats Gold Fields on 11 of the 15 factors compared between the two stocks.

Gold Fields Company Profile

Gold Fields Limited produces gold and holds gold reserves and resources in South Africa, Ghana, Australia, and Peru. The company engages in underground and surface gold and surface copper mining and related activities, including exploration, extraction, processing, and smelting. It holds interests in seven operating mines with an annual gold-equivalent production of approximately 2.2 million ounces, as well as gold mineral reserves of approximately 49 million ounces and mineral resources of approximately 104 million ounces. The company also holds copper mineral reserves totaling 764 million pounds and mineral resources totaling 4,881 million pounds. Gold Fields Limited was founded in 1887 and is based in Sandton, South Africa.

Newmont Mining Company Profile

Newmont Mining Corporation, together with its subsidiaries, operates in the mining industry. The company primarily acquires, develops, explores for, and produces gold, copper, and silver. Its operations and/or assets are located in the United States, Australia, Peru, Ghana, and Suriname. As of February 22, 2018, the company had proven and probable gold reserves of 68.5 million ounces and an aggregate land position of approximately 23,000 square miles. Newmont Mining Corporation was founded in 1916 and is headquartered in Greenwood Village, Colorado.

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