Critical Analysis: AngloGold Ashanti (NYSE:AU) and US Gold (NASDAQ:USAU)

AngloGold Ashanti (NYSE:AU) and US Gold (NASDAQ:USAU) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current ratings and target prices for AngloGold Ashanti and US Gold, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AngloGold Ashanti	1	0	6	1	2.88
US Gold	1	1	3	0	2.40

AngloGold Ashanti presently has a consensus target price of $80.83, indicating a potential downside of 2.17%. US Gold has a consensus target price of $17.33, indicating a potential upside of 3.98%. Given US Gold’s higher possible upside, analysts plainly believe US Gold is more favorable than AngloGold Ashanti.

Risk and Volatility

AngloGold Ashanti has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, US Gold has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Earnings & Valuation

This table compares AngloGold Ashanti and US Gold”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AngloGold Ashanti	$5.79 billion	5.99	$1.00 billion	$4.54	18.20
US Gold	N/A	N/A	-$20.56 million	($1.53)	-10.90

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

Profitability

This table compares AngloGold Ashanti and US Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AngloGold Ashanti	26.25%	24.01%	15.59%
US Gold	N/A	-73.81%	-50.64%

Institutional and Insider Ownership

36.1% of AngloGold Ashanti shares are held by institutional investors. Comparatively, 6.6% of US Gold shares are held by institutional investors. 11.1% of US Gold shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

AngloGold Ashanti beats US Gold on 11 of the 14 factors compared between the two stocks.

About AngloGold Ashanti

AngloGold Ashanti plc operates as a gold mining company in Africa, Australia, and the Americas. The company primarily explores for gold, as well as produces silver and sulphuric acid as by-products. Its flagship property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania. AngloGold Ashanti plc was incorporated in 1944 and is headquartered in Greenwood Village, Colorado.

About US Gold

U.S. Gold Corp. engages in the exploration and development of gold and precious metals in the United States. It also explores for copper and silver deposits. The company holds 100% interests in the CK Gold project, which consists of various mining leases and other mineral rights covering approximately 1,120 acres in Laramie County, Wyoming; the Keystone project that consists of 601 unpatented lode mining claims covering approximately 20 square miles in Eureka County, Nevada; and the Challis Gold project, which consists of 77 unpatented lode mining claims covering approximately 1,710 acres in Lemhi County, Idaho. It also has earn-in agreement to acquire a 50% ownership interest in the Maggie Creek project located in Eureka County, Nevada. The company was formerly known as Dataram Corporation and changed its name to U.S. Gold Corp. in June 2017. U.S. Gold Corp. is based in Elko, Nevada.