Newmont (NYSE:NEM – Get Rating) and Gatos Silver (NYSE:GATO – Get Rating) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.
Risk & Volatility
Newmont has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500. Comparatively, Gatos Silver has a beta of 2.42, indicating that its share price is 142% more volatile than the S&P 500.
Profitability
This table compares Newmont and Gatos Silver’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Newmont | -4.55% | 6.05% | 3.19% |
| Gatos Silver | N/A | -5.99% | -5.76% |
Earnings & Valuation
This table compares Newmont and Gatos Silver’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Newmont | $11.57 billion | 2.91 | -$429.00 million | ($0.66) | -64.30 |
| Gatos Silver | N/A | N/A | -$43.44 million | ($0.37) | -11.00 |
Gatos Silver has lower revenue, but higher earnings than Newmont. Newmont is trading at a lower price-to-earnings ratio than Gatos Silver, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
77.6% of Newmont shares are owned by institutional investors. Comparatively, 49.1% of Gatos Silver shares are owned by institutional investors. 0.1% of Newmont shares are owned by insiders. Comparatively, 5.8% of Gatos Silver shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Newmont and Gatos Silver, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Newmont | 0 | 2 | 9 | 0 | 2.82 |
| Gatos Silver | 0 | 2 | 0 | 0 | 2.00 |
Newmont presently has a consensus target price of $60.53, suggesting a potential upside of 42.63%. Gatos Silver has a consensus target price of $4.38, suggesting a potential upside of 7.49%. Given Newmont’s stronger consensus rating and higher probable upside, equities analysts clearly believe Newmont is more favorable than Gatos Silver.
Summary
Newmont beats Gatos Silver on 7 of the 13 factors compared between the two stocks.
About Newmont
(Get Rating)
Newmont Corp. is a gold producer, engages in the exploration and acquisition of gold properties, contains copper, silver, lead, zinc or other metals. It operates through the following geographical segments: North America, South America, Nevada, Australia, and Africa. The North America segment consists primarily of carlin, phoenix, twin creeks and long canyon in the state of Nevada and Cripple Creek and Victor in the state of Colorado, in the United States. The South America segment composed of Yanacocha in Peru, Merian in Suriname and Cerro Negro. The Australia segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Africa segment composed of Ahafo and Akyem in Ghana. The company was founded by William Boyce Thompson on May 2, 1921, and is headquartered in Denver, CO.
About Gatos Silver
(Get Rating)
Gatos Silver, Inc. engages in the exploration, development, and production of precious metals. It primarily explores for silver ores. The company also explores for zinc, lead, copper, and gold ores. Its flagship asset is the Cerro Los Gatos mine located at the Los Gatos District in Chihuahua state, Mexico. The company was formerly known as Sunshine Silver Mining & Refining Corporation and changed its name to Gatos Silver, Inc. in October 2020. Gatos Silver, Inc. was incorporated in 2009 and is based in Greenwood Village, Colorado.
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