Head to Head Analysis: McEwen Mining (MUX) versus Barrick Gold (GOLD)

McEwen Mining (NYSE:MUX) and Barrick Gold (NYSE:GOLD) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

27.1% of McEwen Mining shares are held by institutional investors. Comparatively, 41.7% of Barrick Gold shares are held by institutional investors. 24.5% of McEwen Mining shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares McEwen Mining and Barrick Gold’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
McEwen Mining $128.82 million 3.83 -$44.87 million ($0.13) -10.54
Barrick Gold $7.24 billion 3.25 -$1.55 billion $0.35 38.34

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

Volatility & Risk

McEwen Mining has a beta of -0.72, indicating that its stock price is 172% less volatile than the S&P 500. Comparatively, Barrick Gold has a beta of -0.52, indicating that its stock price is 152% less volatile than the S&P 500.

Dividends

McEwen Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.7%. Barrick Gold pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. McEwen Mining pays out -7.7% of its earnings in the form of a dividend. Barrick Gold pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Barrick Gold has raised its dividend for 4 consecutive years. Barrick Gold is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
McEwen Mining -35.32% -8.53% -7.10%
Barrick Gold -21.33% 3.85% 1.68%

Analyst Ratings

This is a breakdown of current recommendations and price targets for McEwen Mining and Barrick Gold, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McEwen Mining 0 0 2 0 3.00
Barrick Gold 1 9 6 0 2.31

McEwen Mining presently has a consensus target price of $4.00, indicating a potential upside of 191.97%. Barrick Gold has a consensus target price of $14.50, indicating a potential upside of 8.05%. Given McEwen Mining’s stronger consensus rating and higher possible upside, research analysts plainly believe McEwen Mining is more favorable than Barrick Gold.

Summary

Barrick Gold beats McEwen Mining on 11 of the 17 factors compared between the two stocks.

McEwen Mining Company Profile

McEwen Mining, Inc. is a mining and minerals production and exploration company, which focuses on base metals in Argentina, Mexico and the United States. It operates through the following geographical segments: Mexico, MSC, Nevada, Los Azules, Canada and Other. The company was founded on July 24, 1979 and is headquartered in Toronto, Canada.

Barrick Gold Company Profile

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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