Barrick Gold (NYSE:GOLD) and Wheaton Precious Metals (NYSE:WPM) are both large-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.
Profitability
This table compares Barrick Gold and Wheaton Precious Metals' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Barrick Gold | 24.81% | 5.63% | 3.82% |
| Wheaton Precious Metals | 37.30% | 6.50% | 5.56% |
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Barrick Gold and Wheaton Precious Metals, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Barrick Gold | 0 | 1 | 13 | 1 | 3.00 |
| Wheaton Precious Metals | 0 | 4 | 11 | 0 | 2.73 |
Barrick Gold presently has a consensus price target of $31.2519, suggesting a potential upside of 39.52%. Wheaton Precious Metals has a consensus price target of $57.7273, suggesting a potential upside of 35.57%. Given Barrick Gold's stronger consensus rating and higher possible upside, analysts plainly believe Barrick Gold is more favorable than Wheaton Precious Metals.
Volatility and Risk
Barrick Gold has a beta of -0.02, suggesting that its share price is 102% less volatile than the S&P 500. Comparatively, Wheaton Precious Metals has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.
Insider and Institutional Ownership
60.9% of Barrick Gold shares are owned by institutional investors. Comparatively, 59.5% of Wheaton Precious Metals 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.
Valuation & Earnings
This table compares Barrick Gold and Wheaton Precious Metals' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Barrick Gold | $9.72 billion | 4.10 | $3.97 billion | $0.51 | 43.92 |
| Wheaton Precious Metals | $861.33 million | 22.24 | $86.14 million | $0.56 | 76.04 |
Barrick Gold has higher revenue and earnings than Wheaton Precious Metals. Barrick Gold is trading at a lower price-to-earnings ratio than Wheaton Precious Metals, indicating that it is currently the more affordable of the two stocks.
Dividends
Barrick Gold pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. Wheaton Precious Metals pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. Barrick Gold pays out 70.6% of its earnings in the form of a dividend. Wheaton Precious Metals pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Barrick Gold has increased its dividend for 2 consecutive years and Wheaton Precious Metals has increased its dividend for 1 consecutive years. Barrick Gold is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Barrick Gold beats Wheaton Precious Metals on 10 of the 17 factors compared between the two stocks.
