Critical Review: Pershing Gold Corporation (PGLC) & Newmont Mining Corporation (NEM)
Pershing Gold Corporation (NASDAQ: PGLC) and Newmont Mining Corporation (NYSE:NEM) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.
Valuation and Earnings
This table compares Pershing Gold Corporation and Newmont Mining Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pershing Gold Corporation||N/A||N/A||-$14.71 million||($0.59)||-5.24|
|Newmont Mining Corporation||$7.11 billion||2.85||$2.76 billion||($0.90)||-42.29|
Newmont Mining Corporation has higher revenue and earnings than Pershing Gold Corporation. Newmont Mining Corporation is trading at a lower price-to-earnings ratio than Pershing Gold Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Pershing Gold Corporation and Newmont Mining Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pershing Gold Corporation||N/A||-43.00%||-40.70%|
|Newmont Mining Corporation||-6.73%||6.67%||3.82%|
Institutional and Insider Ownership
19.7% of Pershing Gold Corporation shares are owned by institutional investors. Comparatively, 81.1% of Newmont Mining Corporation shares are owned by institutional investors. 39.8% of Pershing Gold Corporation shares are owned by company insiders. Comparatively, 0.3% of Newmont Mining Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Risk and Volatility
Pershing Gold Corporation has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Newmont Mining Corporation has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for Pershing Gold Corporation and Newmont Mining Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pershing Gold Corporation||0||0||3||0||3.00|
|Newmont Mining Corporation||1||5||11||0||2.59|
Pershing Gold Corporation currently has a consensus target price of $7.88, suggesting a potential upside of 154.85%. Newmont Mining Corporation has a consensus target price of $41.00, suggesting a potential upside of 7.73%. Given Pershing Gold Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Pershing Gold Corporation is more favorable than Newmont Mining Corporation.
Newmont Mining Corporation pays an annual dividend of $0.30 per share and has a dividend yield of 0.8%. Pershing Gold Corporation does not pay a dividend. Newmont Mining Corporation pays out -33.3% of its earnings in the form of a dividend.
Newmont Mining Corporation beats Pershing Gold Corporation on 8 of the 14 factors compared between the two stocks.
Pershing Gold Corporation Company Profile
Pershing Gold Corporation is a gold and precious metals exploration company. The Company focuses on exploration, development and mining opportunities in Nevada. The Company is focused on exploration at its Relief Canyon properties in Pershing County in northwestern Nevada. The Company operates its business directly and also through its subsidiary, Gold Acquisition Corp. Gold Acquisition Corp. owns and is engaged in conducting exploration on the Relief Canyon Mine property in northwestern Nevada. The Company is engaged in conducting exploration on the Relief Canyon expansion properties. The Relief Canyon Mine includes approximately three open pit mines, heap leach pads consisting of approximately six cells, approximately two solution ponds and a cement block constructed adsorption desorption-recovery (ADR) solution processing circuit. The Pershing Pass property includes approximately 490 lode mining claims. The Company has not generated any revenues.
Newmont Mining Corporation Company Profile
Newmont Mining Corporation is a mining company, which is focused on the production of and exploration for gold and copper. The Company is primarily a gold producer with operations and/or assets in the United States, Australia, Peru, Ghana and Suriname. The Company’s segments include North America, South America, Asia Pacific and Africa. The Company’s North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in the state of Nevada, and Cripple Creek &Victor (CC&V) in the state of Colorado, in the United States. The Company’s South America segment consists primarily of Yanacocha in Peru and Merian in Suriname. The Company’s Asia Pacific segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Company’s Africa segment consists primarily of Ahafo and Akyem in Ghana. As of December 31, 2016, it had gold reserves of 68.5 million ounces and an aggregate land position of approximately 23,000 square miles (59,000 square kilometers).
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