Critical Analysis: Nouveau Monde Graphite (NYSE:NMG) versus BHP Group (NYSE:BHP)

Nouveau Monde Graphite (NYSE:NMG) and BHP Group (NYSE:BHP) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Nouveau Monde Graphite and BHP Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nouveau Monde Graphite	1	1	4	1	2.71
BHP Group	1	6	1	2	2.40

Nouveau Monde Graphite currently has a consensus target price of $5.40, suggesting a potential upside of 149.42%. BHP Group has a consensus target price of $56.00, suggesting a potential downside of 27.24%. Given Nouveau Monde Graphite’s stronger consensus rating and higher possible upside, equities analysts clearly believe Nouveau Monde Graphite is more favorable than BHP Group.

Profitability

This table compares Nouveau Monde Graphite and BHP Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nouveau Monde Graphite	N/A	-57.99%	-37.40%
BHP Group	N/A	N/A	N/A

Volatility & Risk

Nouveau Monde Graphite has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, BHP Group has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Valuation & Earnings

This table compares Nouveau Monde Graphite and BHP Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nouveau Monde Graphite	N/A	N/A	-$53.48 million	($0.66)	-3.28
BHP Group	$51.26 billion	3.81	$9.02 billion	N/A	N/A

BHP Group has higher revenue and earnings than Nouveau Monde Graphite.

Institutional & Insider Ownership

41.1% of Nouveau Monde Graphite shares are owned by institutional investors. Comparatively, 3.8% of BHP Group shares are owned by institutional investors. 22.7% of Nouveau Monde Graphite shares are owned by company insiders. Comparatively, 0.0% of BHP Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Nouveau Monde Graphite beats BHP Group on 6 of the 11 factors compared between the two stocks.

About Nouveau Monde Graphite

Nouveau Monde Graphite Inc. engages in the acquisition, exploration, development, and evaluation of mineral properties in Quebec, Canada. It primarily explores for graphite. The company’s flagship property is the 100% owned Matawinie graphite property including 176 mining claims covering an area of 9,264 hectares located in Quebec. It also involved in the real estate and trading activities. The company was formerly known as Nouveau Monde Mining Enterprises Inc. and changed its name to Nouveau Monde Graphite Inc. in February 2017. Nouveau Monde Graphite Inc. was founded in 2011 and is headquartered in Saint-Michel-Des-Saints, Canada.

About BHP Group

BHP Group Limited operates as a resources company in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, South America, and internationally. The company operates through Copper, Iron Ore, and Coal segments. It engages in the mining of copper, uranium, gold, zinc, lead, molybdenum, silver, iron ore, cobalt, and metallurgical and energy coal. The company is also involved in the mining, smelting, and refining of nickel, as well as potash development activities. In addition, it provides towing, freight, marketing and trading, marketing support, finance, administrative, and other services. The company was founded in 1851 and is headquartered in Melbourne, Australia.