Freeport-McMoran (NYSE: FCX) and New Gold (NYSE:NGD) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitabiliy, analyst recommendations, earnings and valuation.

Valuation & Earnings

This table compares Freeport-McMoran and New Gold’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Freeport-McMoran $15.31 billion 1.37 $5.13 billion $0.71 20.38
New Gold $704.10 million 2.79 $282.10 million N/A N/A

Freeport-McMoran has higher revenue and earnings than New Gold.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Freeport-McMoran and New Gold, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Freeport-McMoran 3 9 2 0 1.93
New Gold 1 4 3 0 2.25

Freeport-McMoran presently has a consensus target price of $13.77, indicating a potential downside of 4.84%. New Gold has a consensus target price of $3.88, indicating a potential upside of 13.88%. Given New Gold’s stronger consensus rating and higher probable upside, analysts clearly believe New Gold is more favorable than Freeport-McMoran.

Institutional & Insider Ownership

69.5% of Freeport-McMoran shares are owned by institutional investors. 1.4% of Freeport-McMoran shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Freeport-McMoran and New Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Freeport-McMoran 5.97% 10.45% 2.60%
New Gold 22.12% 6.89% 3.73%

Summary

New Gold beats Freeport-McMoran on 7 of the 12 factors compared between the two stocks.

Freeport-McMoran Company Profile

Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.

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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