Analyzing Newmont (NYSE:NEM) & US Gold (NASDAQ:USAU)

US Gold (NASDAQ:USAU) and Newmont (NYSE:NEM) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Profitability

This table compares US Gold and Newmont’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
US Gold	N/A	-73.41%	-55.36%
Newmont	33.42%	20.35%	11.68%

Insider & Institutional Ownership

6.6% of US Gold shares are owned by institutional investors. Comparatively, 68.9% of Newmont shares are owned by institutional investors. 11.1% of US Gold shares are owned by company insiders. Comparatively, 0.1% of Newmont shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for US Gold and Newmont, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
US Gold	1	1	2	0	2.25
Newmont	0	4	13	5	3.05

US Gold presently has a consensus target price of $26.75, indicating a potential upside of 29.35%. Newmont has a consensus target price of $97.08, indicating a potential downside of 9.19%. Given US Gold’s higher possible upside, analysts clearly believe US Gold is more favorable than Newmont.

Valuation and Earnings

This table compares US Gold and Newmont”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
US Gold	N/A	N/A	-$20.56 million	($1.64)	-12.61
Newmont	$18.68 billion	6.24	$3.35 billion	$6.44	16.60

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

Volatility and Risk

US Gold has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Newmont has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500.

Summary

Newmont beats US Gold on 11 of the 14 factors compared between the two stocks.

About US Gold

U.S. Gold Corp. engages in the exploration and development of gold and precious metals in the United States. It also explores for copper and silver deposits. The company holds 100% interests in the CK Gold project, which consists of various mining leases and other mineral rights covering approximately 1,120 acres in Laramie County, Wyoming; the Keystone project that consists of 601 unpatented lode mining claims covering approximately 20 square miles in Eureka County, Nevada; and the Challis Gold project, which consists of 77 unpatented lode mining claims covering approximately 1,710 acres in Lemhi County, Idaho. It also has earn-in agreement to acquire a 50% ownership interest in the Maggie Creek project located in Eureka County, Nevada. The company was formerly known as Dataram Corporation and changed its name to U.S. Gold Corp. in June 2017. U.S. Gold Corp. is based in Elko, Nevada.

About Newmont

Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana. The company was founded in 1916 and is headquartered in Denver, Colorado.