Newmont (NYSE:NEM) and Sibanye Stillwater (NYSE:SBSW) are both large-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.
Institutional and Insider Ownership
79.2% of Newmont shares are held by institutional investors. Comparatively, 10.7% of Sibanye Stillwater shares are held by institutional investors. 0.3% of Newmont shares are held by company insiders. Comparatively, 0.1% of Sibanye Stillwater shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Newmont and Sibanye Stillwater's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Newmont | $9.74 billion | 4.69 | $2.81 billion | $1.32 | 43.24 |
Sibanye Stillwater | $5.04 billion | 2.90 | $4.30 million | $0.01 | 1,999.00 |
Newmont has higher revenue and earnings than Sibanye Stillwater. Newmont is trading at a lower price-to-earnings ratio than Sibanye Stillwater, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and price targets for Newmont and Sibanye Stillwater, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Newmont | 0 | 4 | 10 | 0 | 2.71 |
Sibanye Stillwater | 0 | 0 | 4 | 0 | 3.00 |
Newmont presently has a consensus target price of $73.8146, suggesting a potential upside of 29.32%. Sibanye Stillwater has a consensus target price of $24.00, suggesting a potential upside of 20.06%. Given Newmont's higher possible upside, equities analysts plainly believe Newmont is more favorable than Sibanye Stillwater.
Volatility and Risk
Newmont has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500. Comparatively, Sibanye Stillwater has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.
Dividends
Newmont pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. Sibanye Stillwater pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. Newmont pays out 121.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sibanye Stillwater pays out 1,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Newmont has increased its dividend for 1 consecutive years. Newmont is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Newmont and Sibanye Stillwater's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Newmont | 23.19% | 7.37% | 4.22% |
Sibanye Stillwater | N/A | N/A | N/A |
Summary
Newmont beats Sibanye Stillwater on 14 of the 17 factors compared between the two stocks.