Critical Analysis: Sibanye Gold (NYSE:SBSW) & Lithium (OTCMKTS:LTUM)

Lithium (OTCMKTS:LTUM) and Sibanye Gold (NYSE:SBSW) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Profitability

This table compares Lithium and Sibanye Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lithium	N/A	-136.62%	-18.80%
Sibanye Gold	N/A	N/A	N/A

Insider and Institutional Ownership

34.9% of Sibanye Gold shares are held by institutional investors. 4.8% of Lithium shares are held by insiders. Comparatively, 0.1% of Sibanye Gold shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Lithium and Sibanye Gold, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lithium	0	0	0	0	0.00
Sibanye Gold	2	1	2	0	2.00

Sibanye Gold has a consensus price target of $17.93, suggesting a potential upside of 124.00%. Given Sibanye Gold’s stronger consensus rating and higher probable upside, analysts plainly believe Sibanye Gold is more favorable than Lithium.

Earnings and Valuation

This table compares Lithium and Sibanye Gold”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lithium	N/A	N/A	-$500,000.00	N/A	N/A
Sibanye Gold	$129.68 billion	0.04	-$289.58 million	N/A	N/A

Lithium has higher earnings, but lower revenue than Sibanye Gold.

Volatility and Risk

Lithium has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Sibanye Gold has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Summary

Sibanye Gold beats Lithium on 7 of the 10 factors compared between the two stocks.

About Lithium

Lithium Corporation, an exploration stage mining company, engages in the identification, acquisition, and exploration of metals and minerals in Nevada and British Columbia. It explores for lithium/boron/potassium, graphite, gold, and silver deposits, as well as titanium and rare earth elements. The company was formerly known as Utalk Communications Inc. and changed its name to Lithium Corporation in September 2009. Lithium Corporation was incorporated in 2007 and is headquartered in Elko, Nevada.

About Sibanye Gold

Sibanye Stillwater Limited, together with its subsidiaries, operates as a precious metals mining company in South Africa, the United States, Europe, and Australia. The company produces gold; platinum group metals (PGMs), including palladium, platinum, rhodium, iridium, and ruthenium; chrome; nickel; and silver, cobalt, and copper. It owns the East Boulder and Stillwater mines located in Montana, the United States; and Columbus metallurgical complex, which smelts the material mined to produce PGM-rich filter cake, as well as conducts PGM recycling activities. The company also involved in the Kroondal, Rustenburg, Marikana, and Platinum Mile operations situated in South Africa; Mimosa located on the southern portion in Zimbabwe; the Driefontein, Kloof, Rand Refinery, and Cooke surface operations located on the West Rand of the Witwatersrand Basin; and the Beatrix situated in the southern Free State. In addition, it owns an interest in surface tailings retreatment facilities; the Marathon PGM project in Ontario, Canada; the Altar and Rio Grande copper gold projects in the Andes in north-west Argentina; the Hoedspruit; and the Burnstone and southern Free State gold projects in South Africa. Sibanye Stillwater Limited was founded in 2013 and is headquartered in Weltevreden Park, South Africa.