Financial Analysis: Agnico Eagle Mines Limited (AEM) vs. AngloGold Ashanti Limited (AU)
Agnico Eagle Mines Limited (NYSE: AEM) and AngloGold Ashanti Limited (NYSE:AU) are both mid-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitabiliy, valuation, risk, analyst recommendations and institutional ownership.
Insider and Institutional Ownership
60.7% of Agnico Eagle Mines Limited shares are owned by institutional investors. Comparatively, 35.9% of AngloGold Ashanti Limited shares are owned by institutional investors. 0.5% of Agnico Eagle Mines Limited shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a summary of recent ratings and recommmendations for Agnico Eagle Mines Limited and AngloGold Ashanti Limited, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Agnico Eagle Mines Limited||1||3||6||0||2.50|
|AngloGold Ashanti Limited||1||4||3||0||2.25|
Agnico Eagle Mines Limited currently has a consensus price target of $55.36, indicating a potential upside of 23.57%. AngloGold Ashanti Limited has a consensus price target of $12.43, indicating a potential upside of 36.00%. Given AngloGold Ashanti Limited’s higher possible upside, analysts plainly believe AngloGold Ashanti Limited is more favorable than Agnico Eagle Mines Limited.
Earnings & Valuation
This table compares Agnico Eagle Mines Limited and AngloGold Ashanti Limited’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Agnico Eagle Mines Limited||$2.21 billion||4.69||$932.83 million||$1.09||41.10|
|AngloGold Ashanti Limited||$4.08 billion||0.92||$1.34 billion||N/A||N/A|
AngloGold Ashanti Limited has higher revenue and earnings than Agnico Eagle Mines Limited.
This table compares Agnico Eagle Mines Limited and AngloGold Ashanti Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Agnico Eagle Mines Limited||11.32%||5.38%||3.40%|
|AngloGold Ashanti Limited||N/A||N/A||N/A|
Risk & Volatility
Agnico Eagle Mines Limited has a beta of -0.67, meaning that its share price is 167% less volatile than the S&P 500. Comparatively, AngloGold Ashanti Limited has a beta of -1.37, meaning that its share price is 237% less volatile than the S&P 500.
Agnico Eagle Mines Limited pays an annual dividend of $0.40 per share and has a dividend yield of 0.9%. AngloGold Ashanti Limited pays an annual dividend of $0.09 per share and has a dividend yield of 1.0%. Agnico Eagle Mines Limited pays out 36.7% of its earnings in the form of a dividend. Agnico Eagle Mines Limited has raised its dividend for 5 consecutive years.
Agnico Eagle Mines Limited beats AngloGold Ashanti Limited on 10 of the 15 factors compared between the two stocks.
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.
About AngloGold Ashanti Limited
AngloGold Ashanti Limited (AngloGold Ashanti) is a gold mining company. The Company’s business activities span the spectrum of the mining value chain. Its main product is gold. Its portfolio includes over 17 mines in approximately nine countries. It also produces silver, uranium and sulfuric acid as by-products. The Company operates through four segments: South Africa, Continental Africa, Australasia and Americas. Its South African operations comprise over four mines and surface production facilities, which include the Vaal River operations, including Kopanang and Moab Khotsong; The West Wits operations, including Mponeng and TauTona, and surface operations. It has operations in Continental Africa in locations, including Democratic Republic of the Congo, Ghana, Guinea, Mali and Tanzania. The Australasia segment includes the operations in Australia. It consists of Sunrise Dam and Tropicana. The Americas segment includes the operations in Argentina, Brazil and the United States.
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