Critical Review: Harmony Gold Mining Company Limited (HMY) & Goldcorp (GG)
Harmony Gold Mining Company Limited (NYSE: HMY) and Goldcorp (NYSE:GG) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitabiliy, earnings, institutional ownership, valuation and risk.
Volatility and Risk
Harmony Gold Mining Company Limited has a beta of -1.95, indicating that its stock price is 295% less volatile than the S&P 500. Comparatively, Goldcorp has a beta of 0.02, indicating that its stock price is 98% less volatile than the S&P 500.
This table compares Harmony Gold Mining Company Limited and Goldcorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Harmony Gold Mining Company Limited||N/A||N/A||N/A|
Harmony Gold Mining Company Limited pays an annual dividend of $0.07 per share and has a dividend yield of 3.9%. Goldcorp pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Goldcorp pays out 14.5% of its earnings in the form of a dividend. Goldcorp has increased its dividend for 4 consecutive years.
Institutional and Insider Ownership
31.7% of Harmony Gold Mining Company Limited shares are owned by institutional investors. Comparatively, 56.8% of Goldcorp shares are owned by institutional investors. 16.0% of Harmony Gold Mining Company Limited shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Harmony Gold Mining Company Limited and Goldcorp’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Harmony Gold Mining Company Limited||$1.47 billion||0.54||$310.57 million||N/A||N/A|
|Goldcorp||$3.52 billion||3.13||$1.33 billion||$0.55||23.13|
Goldcorp has higher revenue and earnings than Harmony Gold Mining Company Limited.
This is a summary of recent ratings and price targets for Harmony Gold Mining Company Limited and Goldcorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Harmony Gold Mining Company Limited||3||2||0||0||1.40|
Goldcorp has a consensus target price of $16.73, suggesting a potential upside of 31.50%. Given Goldcorp’s stronger consensus rating and higher possible upside, analysts plainly believe Goldcorp is more favorable than Harmony Gold Mining Company Limited.
Goldcorp beats Harmony Gold Mining Company Limited on 13 of the 16 factors compared between the two stocks.
About Harmony Gold Mining Company Limited
Harmony Gold Mining Company Limited, through its subsidiaries, is engaged in gold mining and related activities, including exploration, extraction and processing. The Company’s segments include South Africa Underground, Surface, and International. The South Africa Underground segment includes Kusasalethu, Doornkop, Phakisa, Tshepong, Masimong, Target 1, Bambanani, Joel, and Unisel. The Surface segment comprises the Company’s other surface operations. The Company’s International segment comprises Hidden Valley Project. The Company has operations in South Africa and Papua New Guinea (PNG). Harmony’s international operations and assets in Papua New Guinea (PNG) includes one open pit mine (Hidden Valley) and several exploration tenements in PNG. In addition, they own 50% of the significant Golpu project in a joint venture in PNG. The Company’s principal product is the Gold bullion. The Company’s exploration projects include Golpu project and Kili Teke prospect. The Company has approximately nine underground mines, one open pit operation and several surface sources in South Africa. The Company’s subsidiaries include Lydenburg Exploration Limited, Tswelopele Beneficiation Operation (TBO) and Harmony Copper Limited.
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.
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