Alio Gold (NYSE: ALO) and AngloGold Ashanti Limited (NYSE:AU) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Institutional and Insider Ownership

32.8% of AngloGold Ashanti Limited shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Alio Gold and AngloGold Ashanti Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alio Gold N/A N/A N/A
AngloGold Ashanti Limited N/A N/A N/A

Dividends

AngloGold Ashanti Limited pays an annual dividend of $0.09 per share and has a dividend yield of 1.0%. Alio Gold does not pay a dividend.

Earnings & Valuation

This table compares Alio Gold and AngloGold Ashanti Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alio Gold $121.56 million 1.70 $42.14 million N/A N/A
AngloGold Ashanti Limited $4.16 billion 0.90 $1.26 billion N/A N/A

AngloGold Ashanti Limited has higher revenue and earnings than Alio Gold.

Analyst Recommendations

This is a summary of current recommendations for Alio Gold and AngloGold Ashanti Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alio Gold 0 1 0 0 2.00
AngloGold Ashanti Limited 1 4 2 0 2.14

AngloGold Ashanti Limited has a consensus price target of $12.43, indicating a potential upside of 35.26%. Given AngloGold Ashanti Limited’s stronger consensus rating and higher probable upside, analysts clearly believe AngloGold Ashanti Limited is more favorable than Alio Gold.

Summary

AngloGold Ashanti Limited beats Alio Gold on 7 of the 8 factors compared between the two stocks.

About Alio Gold

Alio Gold Inc, formerly Timmins Gold Corp, is a Canada-based gold producer engaged in the operation, development, exploration and acquisition of resource properties in Mexico through its subsidiaries, Timmins Goldcorp Mexico, S.A. de C.V. and Molimentales del Noroeste, S.A. de C.V. (MdN). MdN owns the San Francisco Mine in Sonora, Mexico. MdN also owns the Caballo Blanco Property, an exploration and evaluation asset in Veracruz, Mexico. The Mine and the La Chicharra pit are collectively known as the Gold Property. The Company also holds the Ana Paula gold project, which is an advanced stage development project in the Guerrero Gold Belt. The Guerrero Gold Belt project consists of over two claims totaling approximately 4,200 hectares at the north-west end of the Guerrero Gold Belt, with approximately 38,000 additional hectares in the surrounding area. Ana Paula is located in the north central part of the State of Guerrero in southern Mexico, 180 kilometers from Mexico City.

About AngloGold Ashanti Limited

AngloGold Ashanti Limited (AngloGold Ashanti) is a gold mining company. The Company’s business activities span the spectrum of the mining value chain. Its main product is gold. Its portfolio includes over 17 mines in approximately nine countries. It also produces silver, uranium and sulfuric acid as by-products. The Company operates through four segments: South Africa, Continental Africa, Australasia and Americas. Its South African operations comprise over four mines and surface production facilities, which include the Vaal River operations, including Kopanang and Moab Khotsong; The West Wits operations, including Mponeng and TauTona, and surface operations. It has operations in Continental Africa in locations, including Democratic Republic of the Congo, Ghana, Guinea, Mali and Tanzania. The Australasia segment includes the operations in Australia. It consists of Sunrise Dam and Tropicana. The Americas segment includes the operations in Argentina, Brazil and the United States.

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