New Gold (NYSE: NGD) and BHP Billiton PLC (NYSE:BBL) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for New Gold and BHP Billiton PLC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Gold 0 5 4 0 2.44
BHP Billiton PLC 1 2 1 0 2.00

New Gold currently has a consensus target price of $4.14, indicating a potential upside of 25.89%. BHP Billiton PLC has a consensus target price of $38.00, indicating a potential upside of 1.99%. Given New Gold’s stronger consensus rating and higher possible upside, equities analysts plainly believe New Gold is more favorable than BHP Billiton PLC.

Profitability

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

Net Margins Return on Equity Return on Assets
New Gold 20.49% 5.05% 2.77%
BHP Billiton PLC N/A N/A N/A

Dividends

BHP Billiton PLC pays an annual dividend of $1.66 per share and has a dividend yield of 4.5%. New Gold does not pay a dividend.

Earnings & Valuation

This table compares New Gold and BHP Billiton PLC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
New Gold N/A N/A N/A N/A N/A
BHP Billiton PLC $38.29 billion 1.03 $5.89 billion N/A N/A

BHP Billiton PLC has higher revenue and earnings than New Gold.

Insider & Institutional Ownership

4.1% of BHP Billiton PLC shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

New Gold beats BHP Billiton PLC on 6 of the 9 factors compared between the two stocks.

About New Gold

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.

About BHP Billiton PLC

BHP Billiton Plc is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. It extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. It manages product distribution through its global logistics chain, including freight and pipeline transportation. It sells its products through direct supply agreements with its customers and on global commodity exchanges.

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