Barrick Gold Corporation (NYSE: ABX) and Eldorado Gold Corporation (NYSE:EGO) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitabiliy, dividends, valuation, institutional ownership and earnings.
Profitability
This table compares Barrick Gold Corporation and Eldorado Gold Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Barrick Gold Corporation | 16.44% | 8.34% | 3.32% |
| Eldorado Gold Corporation | -70.93% | 1.47% | 1.07% |
Insider and Institutional Ownership
57.7% of Barrick Gold Corporation shares are owned by institutional investors. Comparatively, 55.9% of Eldorado Gold Corporation shares are owned by institutional investors. 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.
Volatility and Risk
Barrick Gold Corporation has a beta of -0.25, meaning that its share price is 125% less volatile than the S&P 500. Comparatively, Eldorado Gold Corporation has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Barrick Gold Corporation and Eldorado Gold Corporation, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Barrick Gold Corporation | 0 | 9 | 8 | 0 | 2.47 |
| Eldorado Gold Corporation | 1 | 4 | 5 | 0 | 2.40 |
Barrick Gold Corporation currently has a consensus price target of $22.46, suggesting a potential upside of 40.02%. Eldorado Gold Corporation has a consensus price target of $5.11, suggesting a potential upside of 111.20%. Given Eldorado Gold Corporation’s higher probable upside, analysts clearly believe Eldorado Gold Corporation is more favorable than Barrick Gold Corporation.
Earnings & Valuation
This table compares Barrick Gold Corporation and Eldorado Gold Corporation’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Barrick Gold Corporation | $8.62 billion | 2.17 | $4.22 billion | $1.21 | 13.26 |
| Eldorado Gold Corporation | $449.91 million | 3.85 | $161.17 million | ($0.47) | -5.15 |
Barrick Gold Corporation has higher revenue and earnings than Eldorado Gold Corporation. Eldorado Gold Corporation is trading at a lower price-to-earnings ratio than Barrick Gold Corporation, indicating that it is currently the more affordable of the two stocks.
Dividends
Barrick Gold Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. Eldorado Gold Corporation pays an annual dividend of $0.03 per share and has a dividend yield of 1.2%. Barrick Gold Corporation pays out 9.9% of its earnings in the form of a dividend. Eldorado Gold Corporation pays out -6.4% 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. Eldorado Gold Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Barrick Gold Corporation beats Eldorado Gold Corporation on 9 of the 14 factors compared between the two stocks.
About Barrick Gold Corporation
Barrick Gold Corporation (Barrick) is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company’s segments include Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero, Turquoise Ridge, Acacia Mining plc (Acacia), Pascua-Lama and Other Mines. Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines. The Company, through its subsidiary, Acacia, owns gold mines and exploration properties in Africa. It also holds interest in gold mines, including Porgera and Kalgoorlie, and copper mines, such as Zaldivar and Lumwana. The Pascua-Lama project is located on the border between Chile and Argentina. The Company has nine producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia and the Dominican Republic.
About Eldorado Gold Corporation
Eldorado Gold Corporation (Eldorado) is a gold exploration, development and mining company. The Company’s geographical segments include Turkey, Brazil, Greece, Romania and Other. The Turkey segment includes the Kisladag and the Efemcukuru mines and exploration activities in Turkey. The Brazil segment includes the Vila Nova mine, Tocantinzinho project and exploration activities in Brazil. The Greece segment includes the Stratoni mine, the Olympias, Skouries, Perama Hill and Sapes projects, and exploration activities in Greece. The Romania segment includes the Certej project and exploration activities in Romania. Other segment includes operations of the Company’s corporate office and exploration activities in other countries. The Company has operations and ongoing exploration and development projects in Turkey, Greece, Brazil and Romania. Its Operating gold mines include Kisladag in Turkey, and Efemcukuru in Turkey.
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