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

Earnings and Valuation

This table compares Yamana Gold and Freeport-McMoran’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Yamana Gold $1.78 billion 1.46 $541.80 million ($0.45) -6.09
Freeport-McMoran $15.31 billion 1.34 $5.20 billion $0.71 20.00

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

Dividends

Yamana Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.7%. Freeport-McMoran does not pay a dividend. Yamana Gold pays out -4.4% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Yamana Gold -23.63% 0.42% 0.22%
Freeport-McMoran 5.97% 10.45% 2.60%

Volatility and Risk

Yamana Gold has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, Freeport-McMoran has a beta of 2.59, meaning that its share price is 159% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Yamana Gold and Freeport-McMoran, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yamana Gold 1 6 2 0 2.11
Freeport-McMoran 3 10 2 0 1.93

Yamana Gold presently has a consensus target price of $3.73, suggesting a potential upside of 35.95%. Freeport-McMoran has a consensus target price of $13.86, suggesting a potential downside of 2.41%. Given Yamana Gold’s stronger consensus rating and higher possible upside, analysts plainly believe Yamana Gold is more favorable than Freeport-McMoran.

Insider & Institutional Ownership

40.6% of Yamana Gold shares are owned by institutional investors. Comparatively, 69.9% of Freeport-McMoran shares are owned by institutional investors. 2.7% of Yamana Gold shares are owned by company insiders. Comparatively, 1.4% of Freeport-McMoran shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Freeport-McMoran beats Yamana Gold on 8 of the 15 factors compared between the two stocks.

About Yamana Gold

Yamana Gold Inc. is a gold producer with gold production, gold development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. The Company’s segments include Chapada mine in Brazil; El Penon mine in Chile; Canadian Malartic mine in Canada; Gualcamayo mine in Argentina; Minera Florida mine in Chile; Jacobina mine in Brazil; Brio Gold Inc. (Brio Gold), and Corporate and other. The Company’s development projects include Cerro Moro, Argentina; Agua Rica, Argentina, and Gualcamayo, Argentina. Its exploration projects include Chapada, Brazil; El Penon, Chile; Gualcamayo, Argentina; Minera Florida, Chile; Jacobina, Brazil; Cerro Moro, Argentina; Canadian Malartic Corporation, Canada; Monument Bay, Canada; Brio Gold Exploration; Pilar, Brazil; Fazenda Brasileiro, Brazil; RDM, Brazil, and C1 Santa Luz, Brazil.

About Freeport-McMoran

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.

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