Hecla Mining (NYSE:HL) & Newmont (NYSE:NEM) Critical Contrast

Newmont (NYSE:NEM) and Hecla Mining (NYSE:HL) are both large-cap materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

Analyst Ratings

This is a summary of current recommendations for Newmont and Hecla Mining, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Newmont	0	4	18	2	2.92
Hecla Mining	1	6	3	0	2.20

Newmont currently has a consensus target price of $134.26, suggesting a potential upside of 17.12%. Hecla Mining has a consensus target price of $23.34, suggesting a potential upside of 37.44%. Given Hecla Mining’s higher possible upside, analysts clearly believe Hecla Mining is more favorable than Newmont.

Volatility and Risk

Newmont has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Hecla Mining has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Earnings & Valuation

This table compares Newmont and Hecla Mining”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Newmont	$22.67 billion	5.33	$7.08 billion	$7.92	14.47
Hecla Mining	$1.42 billion	8.02	$321.71 million	$0.49	34.66

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

Profitability

This table compares Newmont and Hecla Mining’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Newmont	33.36%	29.10%	17.68%
Hecla Mining	20.84%	18.91%	14.58%

Institutional and Insider Ownership

68.8% of Newmont shares are owned by institutional investors. Comparatively, 63.0% of Hecla Mining shares are owned by institutional investors. 0.1% of Newmont shares are owned by company insiders. Comparatively, 0.7% of Hecla Mining shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Newmont pays an annual dividend of $1.04 per share and has a dividend yield of 0.9%. Hecla Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Newmont pays out 13.1% of its earnings in the form of a dividend. Hecla Mining pays out 2.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Newmont beats Hecla Mining on 11 of the 17 factors compared between the two stocks.

About Newmont

Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana. The company was founded in 1916 and is headquartered in Denver, Colorado.

About Hecla Mining

Hecla Mining Company, together with its subsidiaries, provides precious and base metal properties in the United States, Canada, Japan, Korea, and China. The company mines for silver, gold, lead, and zinc concentrates, as well as carbon material containing silver and gold for custom smelters, metal traders, and third-party processors; and doré containing silver and gold. It flagship project is the Greens Creek mine located on Admiralty Island in southeast Alaska. Hecla Mining Company was incorporated in 1891 and is headquartered in Coeur d'Alene, Idaho.