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

Dividends

Yamana Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.6%. Rio Tinto PLC pays an annual dividend of $2.36 per share and has a dividend yield of 4.9%. Yamana Gold pays out -4.4% of its earnings in the form of a dividend.

Risk and Volatility

Yamana Gold has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Rio Tinto PLC has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Yamana Gold and Rio Tinto PLC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yamana Gold 1 6 2 0 2.11
Rio Tinto PLC 1 3 14 0 2.72

Yamana Gold presently has a consensus target price of $3.73, indicating a potential upside of 20.94%. Rio Tinto PLC has a consensus target price of $47.67, indicating a potential downside of 1.25%. Given Yamana Gold’s higher possible upside, equities analysts clearly believe Yamana Gold is more favorable than Rio Tinto PLC.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Yamana Gold $1.78 billion 1.64 $541.80 million ($0.45) -6.84
Rio Tinto PLC $37.60 billion 2.30 $15.22 billion N/A N/A

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

Profitability

This table compares Yamana Gold and Rio Tinto PLC’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%
Rio Tinto PLC N/A N/A N/A

Institutional and Insider Ownership

42.4% of Yamana Gold shares are owned by institutional investors. Comparatively, 6.9% of Rio Tinto PLC shares are owned by institutional investors. 2.7% of Yamana Gold shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Rio Tinto PLC beats Yamana Gold on 8 of the 15 factors compared between the two stocks.

Yamana Gold Company Profile

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.

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.

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