Reviewing Allied Gold (NYSE:AAUC) and Newmont (NYSE:NEM)

Allied Gold (NYSE:AAUC) and Newmont (NYSE:NEM) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Institutional & Insider Ownership

68.9% of Newmont shares are held by institutional investors. 0.1% of Newmont shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Allied Gold and Newmont, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allied Gold	1	0	0	2	3.00
Newmont	0	4	13	5	3.05

Newmont has a consensus target price of $96.37, suggesting a potential downside of 7.95%. Given Newmont’s stronger consensus rating and higher probable upside, analysts clearly believe Newmont is more favorable than Allied Gold.

Earnings & Valuation

This table compares Allied Gold and Newmont”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allied Gold	$730.38 million	4.25	-$115.63 million	($0.36)	-69.15
Newmont	$18.68 billion	6.12	$3.35 billion	$6.44	16.26

Newmont has higher revenue and earnings than Allied Gold. Allied Gold is trading at a lower price-to-earnings ratio than Newmont, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Allied Gold and Newmont’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allied Gold	-3.58%	24.32%	7.40%
Newmont	33.42%	20.35%	11.68%

Summary

Newmont beats Allied Gold on 13 of the 14 factors compared between the two stocks.

About Allied Gold

Allied Gold Corporation is a gold producer. It operates a portfolio of producing assets and development projects located principally in Cote d’Ivoire, Mali and Ethiopia. Allied Gold Corporation is based in Canada.

About Newmont

Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana. The company was founded in 1916 and is headquartered in Denver, Colorado.