Newmont (NYSE:NEM) and Centerra Gold (NYSE:CGAU) Financial Contrast

Centerra Gold (NYSE:CGAU) and Newmont (NYSE:NEM) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.

Profitability

This table compares Centerra Gold and Newmont’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Centerra Gold	10.68%	10.72%	8.07%
Newmont	-13.16%	8.35%	4.37%

Earnings and Valuation

This table compares Centerra Gold and Newmont”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centerra Gold	$1.09 billion	1.44	-$81.28 million	$0.27	27.48
Newmont	$14.88 billion	4.18	-$2.49 billion	($2.67)	-20.19

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

Dividends

Centerra Gold pays an annual dividend of $0.20 per share and has a dividend yield of 2.7%. Newmont pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Centerra Gold pays out 74.1% of its earnings in the form of a dividend. Newmont pays out -37.5% 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Centerra Gold and Newmont, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centerra Gold	0	2	4	0	2.67
Newmont	0	4	10	2	2.88

Centerra Gold presently has a consensus price target of $11.00, indicating a potential upside of 48.25%. Newmont has a consensus price target of $52.62, indicating a potential downside of 2.38%. Given Centerra Gold’s higher probable upside, analysts clearly believe Centerra Gold is more favorable than Newmont.

Risk and Volatility

Centerra Gold has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Newmont has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Institutional and Insider Ownership

55.4% of Centerra Gold shares are held by institutional investors. Comparatively, 68.8% of Newmont shares are held by institutional investors. 0.2% of Centerra Gold shares are held by insiders. Comparatively, 0.1% of Newmont shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Centerra Gold beats Newmont on 10 of the 17 factors compared between the two stocks.

About Centerra Gold

Centerra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects are the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt gold mine located in Turkey. The company was incorporated in 2002 and is based in Toronto, Canada.

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.