Rio Tinto PLC (NYSE: RIO) and New Gold (NYSE:NGD) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitabiliy.

Valuation & Earnings

This table compares Rio Tinto PLC and New Gold’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rio Tinto PLC $33.78 billion 2.35 $10.74 billion N/A N/A
New Gold $698.80 million 2.54 $287.90 million N/A N/A

Rio Tinto PLC has higher revenue and earnings than New Gold.

Institutional and Insider Ownership

7.1% of Rio Tinto PLC shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Rio Tinto PLC and New Gold, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rio Tinto PLC 2 4 13 1 2.65
New Gold 1 4 3 0 2.25

Rio Tinto PLC presently has a consensus target price of $39.25, indicating a potential downside of 11.08%. New Gold has a consensus target price of $3.88, indicating a potential upside of 25.67%. Given New Gold’s higher possible upside, analysts clearly believe New Gold is more favorable than Rio Tinto PLC.

Dividends

Rio Tinto PLC pays an annual dividend of $1.70 per share and has a dividend yield of 3.9%. New Gold does not pay a dividend.

Profitability

This table compares Rio Tinto PLC and New Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rio Tinto PLC N/A N/A N/A
New Gold 22.12% 6.89% 3.73%

Summary

Rio Tinto PLC beats New Gold on 7 of the 12 factors compared between the two stocks.

Rio Tinto PLC Company Profile

Rio Tinto plc is a mining and metals company. The Company’s business is finding, mining and processing mineral resources. The Company’s segments include Iron Ore, Aluminium, Copper & Diamonds, Energy & Minerals and Other Operations. The Company operates an iron ore business, supplying the global seaborne iron ore trade. Its Iron Ore product operations are located in the Pilbara region of Western Australia. The Aluminium business includes bauxite mines, alumina refineries and aluminum smelters. Its bauxite mines are located in Australia, Brazil and Guinea. The Copper & Diamonds segment has managed operations in Australia, Canada, Mongolia and the United States, and non-managed operations in Chile and Indonesia. The Energy & Minerals segment consists of mining, refining and marketing operations in over 10 countries, across six sectors: borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium.

New Gold Company Profile

New Gold Inc. is an intermediate gold mining company. The Company is engaged in the development and operation of mineral properties. Its segments include New Afton, Mesquite, Peak Mines, Cerro San Pedro, Corporate and Other. It has operating mines in Canada, the United States, Australia and Mexico; development projects in Canada, and a stream on gold production from a development property in Chile. Its development projects include Rainy River and Blackwater projects, which are located in Canada. Its Rainy River project is a gold project located approximately 65 kilometers northwest of Fort Frances in northwestern Ontario, Canada. The Rainy River comprises approximately 192 square kilometers of various rights and claims. The Blackwater Project is located approximately 160 kilometers southwest of the city of Prince George in central British Columbia, Canada and 110 kilometers southwest of the town of Vanderhoof. The Blackwater project covers an area of over 1,000 square kilometers.

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