Newmont Mining Corporation (NYSE: NEM) and Agnico Eagle Mines Limited (NYSE:AEM) are both large-cap basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitabiliy.
Insider and Institutional Ownership
81.9% of Newmont Mining Corporation shares are held by institutional investors. Comparatively, 60.7% of Agnico Eagle Mines Limited shares are held by institutional investors. 0.3% of Newmont Mining Corporation shares are held by company insiders. Comparatively, 0.5% of Agnico Eagle Mines Limited shares are held 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 0.6%. Agnico Eagle Mines Limited pays an annual dividend of $0.40 per share and has a dividend yield of 0.9%. Newmont Mining Corporation pays out -22.2% of its earnings in the form of a dividend. Agnico Eagle Mines Limited pays out 36.7% 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. Agnico Eagle Mines Limited has raised its dividend for 5 consecutive years. Agnico Eagle Mines Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Newmont Mining Corporation and Agnico Eagle Mines Limited’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 | 2.71 | $2.76 billion | ($0.90) | -40.19 |
| Agnico Eagle Mines Limited | $2.21 billion | 4.71 | $932.83 million | $1.09 | 41.27 |
Newmont Mining Corporation has higher revenue and earnings than Agnico Eagle Mines Limited. Newmont Mining Corporation is trading at a lower price-to-earnings ratio than Agnico Eagle Mines Limited, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Newmont Mining Corporation has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500. Comparatively, Agnico Eagle Mines Limited has a beta of -0.67, suggesting that its share price is 167% less volatile than the S&P 500.
Profitability
This table compares Newmont Mining Corporation and Agnico Eagle Mines Limited’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% |
| Agnico Eagle Mines Limited | 11.32% | 5.38% | 3.40% |
Analyst Ratings
This is a breakdown of recent ratings and target prices for Newmont Mining Corporation and Agnico Eagle Mines Limited, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Newmont Mining Corporation | 1 | 6 | 11 | 0 | 2.56 |
| Agnico Eagle Mines Limited | 1 | 3 | 6 | 0 | 2.50 |
Newmont Mining Corporation currently has a consensus price target of $41.87, indicating a potential upside of 15.76%. Agnico Eagle Mines Limited has a consensus price target of $55.36, indicating a potential upside of 23.07%. Given Agnico Eagle Mines Limited’s higher possible upside, analysts clearly believe Agnico Eagle Mines Limited is more favorable than Newmont Mining Corporation.
Summary
Newmont Mining Corporation beats Agnico Eagle Mines Limited 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 Agnico Eagle Mines Limited
Agnico Eagle Mines Limited is a gold producer with mining operations in northwestern Quebec, northern Mexico, northern Finland and Nunavut and exploration activities in Canada, Europe, Latin America and the United States. The Company operates through three business units. The Northern Business consists of its operations in Canada and Finland. The Company’s Canadian properties include the LaRonde mine, the Lapa mine, the Goldex mine, the Meadowbank mine and the Meliadine project, and Canadian Malartic Mine. The operations in Finland include the Kittila mine. The Southern Business consists of its operations in Mexico. Its Pinos Altos mine includes the Creston Mascota deposit. The La India mine is owned by its indirect subsidiary. Its Exploration group focuses on the identification of new mineral reserves and mineral resources, and new development opportunities in gold producing regions. Its exploration activities are concentrated in Canada, Europe, Latin America and the United States.
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