Richmont Mines (NYSE: RIC) and Harmony Gold Mining (NYSE:HMY) are both small-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Insider & Institutional Ownership

53.8% of Richmont Mines shares are owned by institutional investors. Comparatively, 25.0% of Harmony Gold Mining shares are owned by institutional investors. 16.0% of Harmony Gold Mining shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Richmont Mines and Harmony Gold Mining’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Richmont Mines $127.39 million 4.81 $9.41 million $0.27 35.56
Harmony Gold Mining $1.42 billion 0.55 $17.00 million $0.05 34.80

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

Profitability

This table compares Richmont Mines and Harmony Gold Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Richmont Mines 13.14% 8.60% 6.94%
Harmony Gold Mining N/A N/A N/A

Analyst Recommendations

This is a summary of recent ratings for Richmont Mines and Harmony Gold Mining, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Richmont Mines 0 1 2 0 2.67
Harmony Gold Mining 1 2 0 0 1.67

Richmont Mines currently has a consensus price target of $12.33, indicating a potential upside of 28.44%. Given Richmont Mines’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Richmont Mines is more favorable than Harmony Gold Mining.

Dividends

Harmony Gold Mining pays an annual dividend of $0.05 per share and has a dividend yield of 2.9%. Richmont Mines does not pay a dividend. Harmony Gold Mining pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Richmont Mines beats Harmony Gold Mining on 10 of the 14 factors compared between the two stocks.

Richmont Mines Company Profile

Richmont Mines Inc, formerly Ressources Minieres Rouyn Inc, is a Canada-based mining company. The Company is engaged in the mining, exploration and development of mining properties, principally gold. The Company operates gold mines at various sites in Quebec and Ontario. The Company’s segments include Quebec and Ontario. The Company is engaged in the production of gold from the Island Gold Mine in Ontario and the Beaufor Mine in Quebec. The Island Gold mine is located approximately 80 kilometers northeast of Wawa, Ontario. It is part of the Island Gold Project, which is divided into more than eight parts (properties) comprising approximately 200 patented, leased and staked claims covering approximately 8,000 hectares, mainly within the townships of Finan and Jacobson. The Island Gold Project is located in the Michipicoten Greenstone Belt. The Beaufor Mine is located approximately 20 kilometers northeast of Val-d’Or, Quebec.

Harmony Gold Mining Company Profile

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, Unisel and Target 3. 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). 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.

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