PolyMet Mining (NYSE:PLM – Get Rating) and New Gold (NYSE:NGD – Get Rating) are both small-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.
Profitability
This table compares PolyMet Mining and New Gold’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PolyMet Mining | N/A | -5.72% | -4.36% |
| New Gold | 15.36% | 8.64% | 3.22% |
Volatility and Risk
PolyMet Mining has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, New Gold has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500.
Institutional & Insider Ownership
3.8% of PolyMet Mining shares are held by institutional investors. Comparatively, 31.4% of New Gold shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of current ratings and target prices for PolyMet Mining and New Gold, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PolyMet Mining | 0 | 0 | 0 | 0 | N/A |
| New Gold | 0 | 0 | 1 | 0 | 3.00 |
New Gold has a consensus target price of $3.50, suggesting a potential upside of 165.15%. Given New Gold’s higher possible upside, analysts plainly believe New Gold is more favorable than PolyMet Mining.
Earnings and Valuation
This table compares PolyMet Mining and New Gold’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PolyMet Mining | N/A | N/A | -$15.57 million | ($0.20) | -15.25 |
| New Gold | $745.50 million | 1.21 | $140.60 million | $0.17 | 7.76 |
New Gold has higher revenue and earnings than PolyMet Mining. PolyMet Mining is trading at a lower price-to-earnings ratio than New Gold, indicating that it is currently the more affordable of the two stocks.
Summary
New Gold beats PolyMet Mining on 10 of the 10 factors compared between the two stocks.
About PolyMet Mining (Get Rating)
PolyMet Mining Corp., through its subsidiary, Poly Met Mining, Inc., engages in the exploration and development of natural resource properties. Its primary mineral property is the NorthMet project, a polymetallic project that hosts copper, nickel, cobalt, gold, silver, and platinum group metal mineralization covering an area of approximately 4,300 acres located in northeastern Minnesota, the United States. The company was formerly known as Fleck Resources Ltd. and changed its name to PolyMet Mining Corp. in June 1998. PolyMet Mining Corp. was incorporated in 1981 and is headquartered in Saint Paul, Minnesota.
About New Gold (Get Rating)
New Gold Inc., an intermediate gold mining company, engages in the exploration, development, and operation of mineral properties. It primarily explores for gold, silver, and copper deposits. The company’s principal operating properties include 100% interests in the Rainy River mine located in Ontario, Canada; and New Afton mine situated in British Columbia, Canada. It also operates the Cerro San Pedro mine in San Luis Potosí, Mexico. The company was incorporated in 1980 and is headquartered in Toronto, Canada.
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Read More:Analyzing PolyMet Mining (NYSE:PLM) & New Gold (NYSE:NGD)
2022-05-29 13:02:57
