Yamana Gold (NYSE: AUY) and New Gold (NYSE:NGD) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Dividends

Yamana Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.8%. New Gold does not pay a dividend. Yamana Gold pays out -4.4% of its earnings in the form of a dividend.

Institutional & Insider Ownership

42.6% of Yamana Gold shares are owned by institutional investors. 2.7% of Yamana Gold shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Yamana Gold and New Gold, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yamana Gold 1 5 2 0 2.13
New Gold 0 5 4 0 2.44

Yamana Gold currently has a consensus target price of $3.54, indicating a potential upside of 40.38%. New Gold has a consensus target price of $4.14, indicating a potential upside of 18.67%. Given Yamana Gold’s higher probable upside, research analysts clearly believe Yamana Gold is more favorable than New Gold.

Earnings and Valuation

This table compares Yamana Gold and New Gold’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Yamana Gold $1.78 billion 1.34 $541.80 million ($0.45) -5.60
New Gold $704.10 million 2.86 $282.10 million N/A N/A

Yamana Gold has higher revenue and earnings than New Gold.

Profitability

This table compares Yamana Gold and New Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yamana Gold -23.63% 0.42% 0.22%
New Gold 12.45% 4.03% 2.24%

Summary

Yamana Gold beats New Gold on 7 of the 13 factors compared between the two stocks.

About Yamana Gold

Yamana Gold Inc. is a gold producer with gold production, gold development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. The Company’s segments include Chapada mine in Brazil; El Penon mine in Chile; Canadian Malartic mine in Canada; Gualcamayo mine in Argentina; Minera Florida mine in Chile; Jacobina mine in Brazil; Brio Gold Inc. (Brio Gold), and Corporate and other. The Company’s development projects include Cerro Moro, Argentina; Agua Rica, Argentina, and Gualcamayo, Argentina. Its exploration projects include Chapada, Brazil; El Penon, Chile; Gualcamayo, Argentina; Minera Florida, Chile; Jacobina, Brazil; Cerro Moro, Argentina; Canadian Malartic Corporation, Canada; Monument Bay, Canada; Brio Gold Exploration; Pilar, Brazil; Fazenda Brasileiro, Brazil; RDM, Brazil, and C1 Santa Luz, Brazil.

About New Gold

New Gold Inc. is an intermediate gold mining company. The Company is engaged in the development and operation of mineral properties. Its segments include New Afton, Mesquite, Peak Mines, Cerro San Pedro, Corporate and Other. It has operating mines in Canada, the United States, Australia and Mexico; development projects in Canada, and a stream on gold production from a development property in Chile. Its development projects include Rainy River and Blackwater projects, which are located in Canada. Its Rainy River project is a gold project located approximately 65 kilometers northwest of Fort Frances in northwestern Ontario, Canada. The Rainy River comprises approximately 192 square kilometers of various rights and claims. The Blackwater Project is located approximately 160 kilometers southwest of the city of Prince George in central British Columbia, Canada and 110 kilometers southwest of the town of Vanderhoof. The Blackwater project covers an area of over 1,000 square kilometers.

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