Barrick Gold (NYSE:GOLD) and Harmony Gold Mining (NYSE:HMY) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.
Insider and Institutional Ownership
58.9% of Barrick Gold shares are owned by institutional investors. Comparatively, 34.2% 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 endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a summary of recent ratings for Barrick Gold and Harmony Gold Mining, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Harmony Gold Mining||1||0||1||0||2.00|
Barrick Gold presently has a consensus target price of $15.50, suggesting a potential downside of 9.94%. Harmony Gold Mining has a consensus target price of $2.11, suggesting a potential downside of 17.58%. Given Barrick Gold’s stronger consensus rating and higher probable upside, equities analysts clearly believe Barrick Gold is more favorable than Harmony Gold Mining.
Valuation & Earnings
This table compares Barrick Gold 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|
|Barrick Gold||$7.24 billion||4.16||-$1.55 billion||$0.35||49.17|
|Harmony Gold Mining||$1.59 billion||0.72||-$321.00 million||$0.13||19.69|
Harmony Gold Mining has lower revenue, but higher earnings than Barrick Gold. Harmony Gold Mining is trading at a lower price-to-earnings ratio than Barrick Gold, indicating that it is currently the more affordable of the two stocks.
Barrick Gold pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. Harmony Gold Mining does not pay a dividend. Barrick Gold pays out 45.7% of its earnings in the form of a dividend. Barrick Gold has raised its dividend for 4 consecutive years and Harmony Gold Mining has raised its dividend for 2 consecutive years.
This table compares Barrick Gold and Harmony Gold Mining’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Harmony Gold Mining||N/A||N/A||N/A|
Risk and Volatility
Barrick Gold has a beta of -0.24, suggesting that its stock price is 124% less volatile than the S&P 500. Comparatively, Harmony Gold Mining has a beta of -1.3, suggesting that its stock price is 230% less volatile than the S&P 500.
Barrick Gold beats Harmony Gold Mining on 13 of the 17 factors compared between the two stocks.
Barrick Gold Company Profile
Barrick Gold Corporation engages in the exploration and development of mineral properties. It primarily explores for gold and copper deposits. The company holds a 50% interest in the Veladero mine located in the San Juan Province of Argentina; 50% interest in the KCGM, a gold mine located in Australia; 95% interest in Porgera, a gold mine located in Papua New Guinea; 50% interest in the ZaldÃvar, a copper mine located in Chile; and 50% interest in the Jabal Sayid, a copper mine located in Saudi Arabia. It also owns gold mines and exploration properties in Africa; and gold projects located in South America and North America. Barrick Gold Corporation has strategic cooperation agreement with Shandong Gold Group Co. Ltd. The company was founded in 1983 and is headquartered in Toronto, Canada.
Harmony Gold Mining Company Profile
Harmony Gold Mining Company Limited engages in the exploration, extraction, and processing of gold in South Africa and Papua New Guinea. The company also explores for copper and silver deposits. It has nine underground operations; an open-pit mine; and various surface treatment operations in South Africa. The company owns interests in the Hidden Valley, an open-pit gold and silver mine; the Wafi-Golpu, a gold-copper project in Morobe province; and the Kili Teke, a gold-copper project in Papua New Guinea. Harmony Gold Mining Company Limited was incorporated in 1950 and is based in Randfontein, South Africa.
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