Newmont Mining Corporation (NYSE: NEM) and Eldorado Gold Corporation (NYSE:EGO) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitabiliy, analyst recommendations, risk, institutional ownership and dividends.
Analyst Ratings
This is a breakdown of current ratings for Newmont Mining Corporation and Eldorado Gold Corporation, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Newmont Mining Corporation | 1 | 6 | 11 | 0 | 2.56 |
| Eldorado Gold Corporation | 2 | 5 | 3 | 0 | 2.10 |
Newmont Mining Corporation currently has a consensus price target of $41.87, suggesting a potential upside of 13.56%. Eldorado Gold Corporation has a consensus price target of $4.74, suggesting a potential upside of 138.14%. Given Eldorado Gold Corporation’s higher probable upside, analysts plainly believe Eldorado Gold Corporation is more favorable than Newmont Mining Corporation.
Volatility & Risk
Newmont Mining Corporation has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500. Comparatively, Eldorado Gold Corporation has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.
Profitability
This table compares Newmont Mining Corporation and Eldorado Gold Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Newmont Mining Corporation | -6.73% | 6.67% | 3.82% |
| Eldorado Gold Corporation | 1.00% | 1.40% | 1.03% |
Insider & Institutional Ownership
81.4% of Newmont Mining Corporation shares are owned by institutional investors. Comparatively, 50.5% of Eldorado Gold Corporation shares are owned by institutional investors. 0.3% of Newmont Mining Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Dividends
Newmont Mining Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Eldorado Gold Corporation pays an annual dividend of $0.03 per share and has a dividend yield of 1.5%. Newmont Mining Corporation pays out -22.2% of its earnings in the form of a dividend. Eldorado Gold Corporation pays out 300.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings & Valuation
This table compares Newmont Mining Corporation and Eldorado Gold Corporation’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Newmont Mining Corporation | $7.11 billion | 2.77 | $2.76 billion | ($0.90) | -40.97 |
| Eldorado Gold Corporation | $425.59 million | 3.35 | $143.89 million | $0.01 | 199.20 |
Newmont Mining Corporation has higher revenue and earnings than Eldorado Gold Corporation. Newmont Mining Corporation is trading at a lower price-to-earnings ratio than Eldorado Gold Corporation, indicating that it is currently the more affordable of the two stocks.
Summary
Newmont Mining Corporation beats Eldorado Gold Corporation on 9 of the 16 factors compared between the two stocks.
About Newmont Mining Corporation
Newmont Mining Corporation is a mining company, which is focused on the production of and exploration for gold and copper. The Company is primarily a gold producer with operations and/or assets in the United States, Australia, Peru, Ghana and Suriname. The Company’s segments include North America, South America, Asia Pacific and Africa. The Company’s North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in the state of Nevada, and Cripple Creek &Victor (CC&V) in the state of Colorado, in the United States. The Company’s South America segment consists primarily of Yanacocha in Peru and Merian in Suriname. The Company’s Asia Pacific segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Company’s Africa segment consists primarily of Ahafo and Akyem in Ghana. As of December 31, 2016, it had gold reserves of 68.5 million ounces and an aggregate land position of approximately 23,000 square miles (59,000 square kilometers).
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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