Goldcorp (NYSE: GG) and Sibanye Gold Limited (NYSE:SBGL) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitabiliy, risk, institutional ownership, valuation, dividends, earnings and analyst recommendations.

Profitability

This table compares Goldcorp and Sibanye Gold Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Goldcorp 13.22% 3.43% 2.15%
Sibanye Gold Limited N/A N/A N/A

Dividends

Goldcorp pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Sibanye Gold Limited pays an annual dividend of $0.32 per share and has a dividend yield of 5.8%. Goldcorp pays out 14.5% of its earnings in the form of a dividend. Sibanye Gold Limited has increased its dividend for 4 consecutive years. Sibanye Gold Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

56.8% of Goldcorp shares are held by institutional investors. Comparatively, 14.1% of Sibanye Gold Limited shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Goldcorp and Sibanye Gold Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Goldcorp 0 10 6 0 2.38
Sibanye Gold Limited 1 2 1 0 2.00

Goldcorp presently has a consensus price target of $16.73, indicating a potential upside of 33.18%. Given Goldcorp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Goldcorp is more favorable than Sibanye Gold Limited.

Earnings & Valuation

This table compares Goldcorp and Sibanye Gold Limited’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Goldcorp $3.52 billion 3.09 $1.33 billion $0.55 22.84
Sibanye Gold Limited $2.39 billion 0.54 $768.92 million N/A N/A

Goldcorp has higher revenue and earnings than Sibanye Gold Limited.

Volatility & Risk

Goldcorp has a beta of 0.02, meaning that its stock price is 98% less volatile than the S&P 500. Comparatively, Sibanye Gold Limited has a beta of -0.13, meaning that its stock price is 113% less volatile than the S&P 500.

Summary

Goldcorp beats Sibanye Gold Limited on 11 of the 14 factors compared between the two stocks.

About Goldcorp

Goldcorp Inc. is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company’s segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). The Company’s principal product is gold dore with the refined gold bullion sold primarily in the London spot market.

About Sibanye Gold Limited

Sibanye Gold Limited (Sibanye) is a South Africa-based mining company. The Company owns and operates gold and uranium operations, and projects throughout the Witwatersrand Basin. Its segments include Driefontein, Kloof, Beatrix, Cooke and Corporate. The Company owns and operates four underground and surface gold operations: the Cooke, Driefontein and Kloof operations in the West Witwatersrand region, and the Beatrix operation in the southern Free State province. In addition to its mining activities, Sibanye owns and manages extraction and processing facilities at the operations where the gold-bearing ore is treated. The Company has various organic projects, including the Kloof and Driefontein below infrastructure projects on the West Rand and the Burnstone project on the South Rand of Gauteng province. Sibanye mines, extracts and processes gold ore to produce a product, dore. Sibanye derives uranium ore as a by-product of gold production from the Cooke operation.

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