McEwen Mining (MUX) & Newmont Mining (NEM) Head to Head Review

McEwen Mining (NYSE:MUX) and Newmont Mining (NYSE:NEM) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Valuation and Earnings

This table compares McEwen Mining and Newmont Mining’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
McEwen Mining $67.72 million 9.76 -$10.63 million ($0.03) -65.33
Newmont Mining $7.35 billion 2.35 -$98.00 million $1.46 22.21

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

Profitability

This table compares McEwen Mining and Newmont Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
McEwen Mining -17.63% -3.84% -3.29%
Newmont Mining -2.63% 6.19% 3.50%

Analyst Recommendations

This is a breakdown of current ratings and price targets for McEwen Mining and Newmont Mining, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McEwen Mining 0 0 2 0 3.00
Newmont Mining 1 6 7 0 2.43

McEwen Mining currently has a consensus price target of $4.00, suggesting a potential upside of 104.08%. Newmont Mining has a consensus price target of $40.62, suggesting a potential upside of 25.28%. Given McEwen Mining’s stronger consensus rating and higher probable upside, equities analysts clearly believe McEwen Mining is more favorable than Newmont Mining.

Insider and Institutional Ownership

29.8% of McEwen Mining shares are owned by institutional investors. Comparatively, 82.9% of Newmont Mining shares are owned by institutional investors. 26.1% of McEwen Mining shares are owned by insiders. Comparatively, 0.4% of Newmont Mining shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

McEwen Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.5%. Newmont Mining pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. McEwen Mining pays out -33.3% of its earnings in the form of a dividend. Newmont Mining pays out 38.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Newmont Mining has raised its dividend for 2 consecutive years. Newmont Mining is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

McEwen Mining has a beta of -0.99, suggesting that its stock price is 199% less volatile than the S&P 500. Comparatively, Newmont Mining has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500.

Summary

Newmont Mining beats McEwen Mining on 11 of the 17 factors compared between the two stocks.

McEwen Mining Company Profile

McEwen Mining Inc. engages in the exploration, development, production, and sale of gold and silver. The company owns 100% interests in the El Gallo 1 mine and El Gallo 2 project in the state of Sinaloa, Mexico; and the Black Fox Complex, Buffalo Ankerite, Fuller, Davidson Tisdale, and Black Fox North properties in Canada. It also owns a 61.01% interest in the Paymaster property in Canada; and a 49% interest in the San José mine in the province of Santa Cruz, Argentina. In addition, the company owns 100% interests in the Gold Bar and Tonkin properties in Nevada, the United States; and the Los Azules copper project in San Juan, Argentina. Further, it owns interests in other exploration properties located in the United States; and in the province of San Juan, Argentina, as well as in Mexico. The company was formerly known as US Gold Corporation and changed its name to McEwen Mining Inc. in January 2012. McEwen Mining Inc. was founded in 1979 and is based in Toronto, Canada.

Newmont Mining Company Profile

Newmont Mining Corporation, together with its subsidiaries, operates in the mining industry. The company primarily acquires, develops, explores for, and produces gold, copper, and silver. Its operations and/or assets are located in the United States, Australia, Peru, Ghana, and Suriname. As of February 22, 2018, the company had proven and probable gold reserves of 68.5 million ounces and an aggregate land position of approximately 23,000 square miles. Newmont Mining Corporation was founded in 1916 and is headquartered in Greenwood Village, Colorado.

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