Comparing Yamana Gold (AUY) and Barrick Gold (ABX)

Yamana Gold (NYSE:AUY) and Barrick Gold (NYSE:ABX) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Analyst Recommendations

This is a summary of current recommendations for Yamana Gold and Barrick Gold, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yamana Gold 0 3 8 0 2.73
Barrick Gold 1 14 3 0 2.11

Yamana Gold presently has a consensus price target of $4.00, indicating a potential upside of 60.00%. Barrick Gold has a consensus price target of $15.15, indicating a potential upside of 32.12%. Given Yamana Gold’s stronger consensus rating and higher probable upside, analysts clearly believe Yamana Gold is more favorable than Barrick Gold.

Volatility & Risk

Yamana Gold has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Barrick Gold has a beta of -0.37, meaning that its share price is 137% less volatile than the S&P 500.

Dividends

Yamana Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.8%. Barrick Gold pays an annual dividend of $0.12 per share and has a dividend yield of 1.0%. Yamana Gold pays out 25.0% of its earnings in the form of a dividend. Barrick Gold pays out 16.0% 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. Barrick Gold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

42.1% of Yamana Gold shares are held by institutional investors. Comparatively, 52.7% of Barrick Gold shares are held by institutional investors. 2.7% of Yamana Gold shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Yamana Gold and Barrick Gold’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Yamana Gold $1.80 billion 1.32 -$194.40 million $0.08 31.25
Barrick Gold $8.37 billion 1.60 $1.44 billion $0.75 15.29

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

Profitability

This table compares Yamana Gold and Barrick Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yamana Gold -15.63% 3.49% 1.77%
Barrick Gold -3.38% 6.13% 2.74%

Summary

Barrick Gold beats Yamana Gold on 10 of the 16 factors compared between the two stocks.

About Yamana Gold

Yamana Gold Inc. operates as a gold producer with gold production, gold development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile, and Argentina. It primarily sells precious metals, including gold, silver, and copper. The company was formerly known as Yamana Resources Inc. and changed its name to Yamana Gold Inc. in July 2003. Yamana Gold Inc. was founded in 1980 and is based in Toronto, Canada.

About Barrick Gold

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 Zaldívar, 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.

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