Financial Review: Iamgold (IAG) and Buenaventura Mining (BVN)

Iamgold (NYSE: IAG) and Buenaventura Mining (NYSE:BVN) are both mid-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

Volatility & Risk

Iamgold has a beta of -0.57, indicating that its share price is 157% less volatile than the S&P 500. Comparatively, Buenaventura Mining has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Profitability

This table compares Iamgold and Buenaventura Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Iamgold 48.66% 1.81% 1.23%
Buenaventura Mining -29.67% -11.11% -7.90%

Dividends

Buenaventura Mining pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Iamgold does not pay a dividend. Buenaventura Mining pays out -5.8% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and target prices for Iamgold and Buenaventura Mining, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Iamgold 0 6 2 0 2.25
Buenaventura Mining 0 2 1 0 2.33

Iamgold presently has a consensus price target of $7.19, suggesting a potential upside of 37.45%. Buenaventura Mining has a consensus price target of $17.30, suggesting a potential upside of 29.30%. Given Iamgold’s higher possible upside, equities analysts plainly believe Iamgold is more favorable than Buenaventura Mining.

Earnings & Valuation

This table compares Iamgold and Buenaventura Mining’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Iamgold $987.10 million 2.46 $52.60 million $1.10 4.75
Buenaventura Mining $1.07 billion 3.18 -$323.49 million ($1.39) -9.63

Iamgold has higher earnings, but lower revenue than Buenaventura Mining. Buenaventura Mining is trading at a lower price-to-earnings ratio than Iamgold, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

56.1% of Iamgold shares are owned by institutional investors. Comparatively, 45.3% of Buenaventura Mining shares are owned by institutional investors. 19.3% of Buenaventura Mining shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Iamgold beats Buenaventura Mining on 8 of the 15 factors compared between the two stocks.

About Iamgold

IAMGOLD Corporation (IAMGOLD) is engaged primarily in the exploration for, and the development and production of, mineral resource properties throughout the world. Through its holdings, IAMGOLD has interests in various operations, exploration and development properties. IAMGOLD is a mid-tier mining company with approximately four operating gold mines on over three continents. The Company’s gold mine segment is divided into geographic segments, such as Burkina Faso – Essakane mine; Suriname-Rosebel mine; Canada-Doyon division, which includes the Westwood mine and the Doyon mine, and Joint ventures (Mali)-Sadiola mine (41%) and Yatela mine (40%). The Company’s non-gold segments are divided into Exploration and evaluation, and Corporate, which includes royalty interests located in Canada and investments in associates and joint ventures. In Canada, the Company owns the Westwood mine in Quebec and the Cote Gold project, a development project located in Ontario.

About Buenaventura Mining

Compania de Minas Buenaventura S.A.A. (Buenaventura) is a precious metals company. The Company is engaged in the exploration, mining and processing of gold, silver and other metals in Peru. The Company’s segments include Production and sale of minerals; Exploration and development activities; Construction and engineering services; Energy generation and transmission services; Insurance brokerage; Rental of mining concessions; Holding of investment in shares (mainly in Minera Yanacocha S.R.L. and S.M.R.L. Chaupiloma Dos de Cajamarca), and Industrial activities. The Company operates the Orcopampa, Uchucchacua, Julcani, Mallay and Breapampa mines and has controlling interests in over three other mining companies, which operate the Colquijirca-Marcapunta, Tantahuatay and La Zanja mines. It also owns an electric power transmission company, a hydroelectric plant, a processing plant and an engineering services consulting company and non-controlling interests in various other mining companies.

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