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

Valuation and Earnings

This table compares Pan American Silver and Sibanye Gold’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pan American Silver $816.83 million 2.79 $120.99 million $0.51 29.20
Sibanye Gold $3.45 billion 0.18 -$334.13 million ($0.04) -62.75

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

Dividends

Pan American Silver pays an annual dividend of $0.14 per share and has a dividend yield of 0.9%. Sibanye Gold does not pay a dividend. Pan American Silver pays out 27.5% of its earnings in the form of a dividend. Sibanye Gold has increased its dividend for 2 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Pan American Silver 17.95% 7.06% 5.48%
Sibanye Gold N/A N/A N/A

Insider & Institutional Ownership

48.2% of Pan American Silver shares are held by institutional investors. Comparatively, 56.2% of Sibanye Gold shares are held by institutional investors. 12.9% of Pan American Silver shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Pan American Silver has a beta of 0.11, indicating that its stock price is 89% less volatile than the S&P 500. Comparatively, Sibanye Gold has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Pan American Silver and Sibanye Gold, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pan American Silver 0 2 9 0 2.82
Sibanye Gold 1 2 2 0 2.20

Pan American Silver currently has a consensus price target of $21.00, indicating a potential upside of 41.03%. Given Pan American Silver’s stronger consensus rating and higher probable upside, analysts plainly believe Pan American Silver is more favorable than Sibanye Gold.

Summary

Pan American Silver beats Sibanye Gold on 12 of the 17 factors compared between the two stocks.

Pan American Silver Company Profile

Pan American Silver Corp., together with its subsidiaries, engages in exploration, extraction, processing, refining, and reclamation of silver mines. The company owns and operates silver mines located in Peru, Mexico, Argentina, and Bolivia. It also produces and sells gold, zinc, lead, and copper. The company holds interests in the La Colorada, Dolores, Alamo Dorado, Huaron, Morococha, Manantial Espejo, and San Vicente mines. Pan American Silver Corp. was founded in 1979 and is headquartered in Vancouver, Canada.

Sibanye Gold Company Profile

Sibanye Gold Limited operates as a precious metals mining company in South Africa, Zimbabwe, and the United States. The company operates through PGM; and Gold and Uranium divisions. It owns and operates gold, and platinum group metals (PGM), including platinum, palladium, and rhodium operations and projects, as well as produces by-products, such as iridium, ruthenium, nickel, copper, and chrome. The company owns and operates four underground and surface gold operations in the West Witwatersrand region and the southern Free State province of South Africa; and underground and surface PGM operations in the Bushveld Igneous Complex in South Africa, the Great Dyke in Zimbabwe, and Montana in the United States. It also owns and manages extraction and processing facilities to produce gold doré; recycles PGMs from catalytic materials and other industrial sources; and operates a smelter and base metal refinery. Sibanye Gold Limited was incorporated in 2002 and is based in Westonaria, South Africa.

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