Critical Review: New Wei (WLTGQ) and BHP Billiton (BBL)

New Wei (OTCMKTS:WLTGQ) and BHP Billiton (NYSE:BBL) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Earnings & Valuation

This table compares New Wei and BHP Billiton’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Wei N/A N/A N/A N/A N/A
BHP Billiton $43.64 billion 0.95 $3.71 billion $3.36 11.70

BHP Billiton has higher revenue and earnings than New Wei.

Profitability

This table compares New Wei and BHP Billiton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Wei N/A N/A N/A
BHP Billiton N/A N/A N/A

Risk and Volatility

New Wei has a beta of 56.38, suggesting that its share price is 5,538% more volatile than the S&P 500. Comparatively, BHP Billiton has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Dividends

BHP Billiton pays an annual dividend of $2.52 per share and has a dividend yield of 6.4%. New Wei does not pay a dividend. BHP Billiton pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent ratings for New Wei and BHP Billiton, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Wei 0 0 0 0 N/A
BHP Billiton 0 3 5 0 2.63

BHP Billiton has a consensus target price of $38.00, indicating a potential downside of 3.36%. Given BHP Billiton’s higher possible upside, analysts plainly believe BHP Billiton is more favorable than New Wei.

Insider & Institutional Ownership

0.0% of New Wei shares are held by institutional investors. Comparatively, 4.3% of BHP Billiton shares are held by institutional investors. 1.3% of New Wei shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

BHP Billiton beats New Wei on 5 of the 8 factors compared between the two stocks.

About New Wei

Walter Energy, Inc. is a producer and exporter of metallurgical coal for the global steel industry. It also produces thermal coal, anthracite, metallurgical coke and coal bed methane gas and other related products. The company operates through following reportable segments: U.S. Operations, Canadian and U.K. Operations, and Other. The U.S. Operations segment includes hard coking coal and thermal coal mines in both Alabama and West Virginia, a coke plant in Alabama, and coal bed methane extraction operations also located in Alabama. The Alabama operations consist of two underground hard coking coal mines in Southern Appalachia’s Blue Creek coal seam, one underground thermal coal mine, one surface hard coking coal mine and two surface hard coking and thermal coal mines. The West Virginia operations acquired four mines on two properties in West Virginia through the acquisition of Western Coal. The Mines on these properties produce both hard coking and thermal coal. The two properties are the Gauley Eagle and Maple properties and each has an underground mine and surface mine. The Canadian mining operations segment currently operate three surface metallurgical coal mines in Northeast British Columbia’s coalfields. Within British Columbia, the company holds the right to two large multi-deposit coal property groups: the Wolverine group, including the Perry Creek, EB and Hermann deposits; and the Brazion group, including the Brule Mine and the Willow Creek Mine and less explored portions of these properties and adjacent properties. The U.K. mining operation segment consists of an underground and surface mine located in South Wales. Walter Energy was founded by James Willis Walter in 1946 and is headquartered in Birmingham, AL.

About BHP Billiton

BHP Billiton Plc, together with its subsidiaries, discovers, acquires, develops, and markets natural resources worldwide. It operates through four segments: Petroleum, Copper, Iron Ore, and Coal. The company explores for copper, silver, lead, zinc, molybdenum, uranium, gold, and iron ores, as well as metallurgical coal, energy coal, and oil and gas. It also engages in the mining, smelting, and refining of nickel; the provision of freight, finance, and administrative services, as well as trading, marketing, and support services; and potash development activities. The company was formerly known as Billiton Plc. The company was incorporated in 1996 and is based in London, the United Kingdom. BHP Billiton Plc is a subsidiary of BHP Billiton Group.

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