Financial Review: Western Digital (NASDAQ:WDC) & US Gold (NASDAQ:USAU)

US Gold (NASDAQ:USAU) and Western Digital (NASDAQ:WDC) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
US Gold N/A -100.90% -97.17%
Western Digital -4.55% 10.73% 4.15%

Dividends

Western Digital pays an annual dividend of $2.00 per share and has a dividend yield of 3.1%. US Gold does not pay a dividend. Western Digital pays out 52.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and target prices for US Gold and Western Digital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
US Gold 0 0 1 0 3.00
Western Digital 3 13 13 0 2.34

US Gold currently has a consensus target price of $3.00, suggesting a potential upside of 180.37%. Western Digital has a consensus target price of $61.83, suggesting a potential downside of 3.85%. Given US Gold’s stronger consensus rating and higher probable upside, equities research analysts plainly believe US Gold is more favorable than Western Digital.

Risk and Volatility

US Gold has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Western Digital has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500.

Institutional & Insider Ownership

1.9% of US Gold shares are owned by institutional investors. Comparatively, 86.7% of Western Digital shares are owned by institutional investors. 12.1% of US Gold shares are owned by company insiders. Comparatively, 0.4% of Western Digital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares US Gold and Western Digital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
US Gold N/A N/A -$8.05 million ($0.44) -2.43
Western Digital $16.57 billion 1.15 -$754.00 million $3.81 16.88

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

Summary

Western Digital beats US Gold on 9 of the 15 factors compared between the two stocks.

US Gold Company Profile

U.S. Gold Corp. operates as a gold exploration and development company in the United States. It has a portfolio of development and exploration properties. The company's properties include the Copper King project, an advanced stage gold and copper exploration and development project located in southeast Wyoming; Keystone project, an exploration property on the Cortez Trend in Nevada; and the Gold Bar North project, a gold exploration property located in Eureka County, Nevada. The company is based in Elko, Nevada.

Western Digital Company Profile

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions worldwide. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for computing devices, such as desktop and notebook PCs, security surveillance systems, gaming consoles, and set top boxes; flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, IoT, industrial, and connected home applications; flash-based memory wafers; and embedded storage solutions and iNAND embedded flash products, such as multi-chip package solutions. The company also provides data center devices and solutions comprising enterprise helium hard drives; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; data center solutions, including HDDs and drive configurations for use in data storage systems and tiered storage models; system solutions that offer petabyte scalable capacity; and data storage platforms and systems. In addition, it offers client solution, such as external HDD storage products in mobile and desktop form; client SSDs; removable cards used in consumer devices comprising mobile phones, tablets, imaging systems, still cameras, action video cameras, and security surveillance systems; universal serial bus flash drives used in the computing and consumer markets; and wireless drive products for in-field back up of created content, as well as wireless streaming of high-definition movies, photos, music and documents to tablets, smartphones, and personal computers (PCs). The company sells its products under the HGST, SanDisk, and WD brands to original equipment manufacturers, distributors, resellers, cloud infrastructure players, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.

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