Barrick Gold Corporation (NYSE: ABX) and Pershing Gold Corporation (NASDAQ:PGLC) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Insider & Institutional Ownership

55.7% of Barrick Gold Corporation shares are owned by institutional investors. Comparatively, 19.7% of Pershing Gold Corporation shares are owned by institutional investors. 39.8% of Pershing Gold Corporation shares are owned by company 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

Barrick Gold Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. Pershing Gold Corporation does not pay a dividend. Barrick Gold Corporation pays out 5.9% of its earnings in the form of a dividend.

Risk & Volatility

Barrick Gold Corporation has a beta of -0.33, suggesting that its share price is 133% less volatile than the S&P 500. Comparatively, Pershing Gold Corporation has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Barrick Gold Corporation and Pershing Gold Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barrick Gold Corporation 0 8 5 0 2.38
Pershing Gold Corporation 0 0 3 0 3.00

Barrick Gold Corporation currently has a consensus target price of $19.99, suggesting a potential upside of 19.70%. Pershing Gold Corporation has a consensus target price of $7.88, suggesting a potential upside of 152.40%. Given Pershing Gold Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Pershing Gold Corporation is more favorable than Barrick Gold Corporation.

Profitability

This table compares Barrick Gold Corporation and Pershing Gold Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barrick Gold Corporation 26.95% 8.91% 3.71%
Pershing Gold Corporation N/A -43.00% -40.70%

Valuation and Earnings

This table compares Barrick Gold Corporation and Pershing Gold Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Barrick Gold Corporation $8.77 billion 2.22 $4.42 billion $2.02 8.27
Pershing Gold Corporation N/A N/A -$14.71 million ($0.59) -5.29

Barrick Gold Corporation has higher revenue and earnings than Pershing Gold Corporation. Pershing Gold Corporation is trading at a lower price-to-earnings ratio than Barrick Gold Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Barrick Gold Corporation beats Pershing Gold Corporation on 9 of the 14 factors compared between the two stocks.

Barrick Gold Corporation Company Profile

Barrick Gold Corporation (Barrick) is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company’s segments include Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero, Turquoise Ridge, Acacia Mining plc (Acacia), Pascua-Lama and Other Mines. Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines. The Company, through its subsidiary, Acacia, owns gold mines and exploration properties in Africa. It also holds interest in gold mines, including Porgera and Kalgoorlie, and copper mines, such as Zaldivar and Lumwana. The Pascua-Lama project is located on the border between Chile and Argentina. The Company has nine producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia and the Dominican Republic.

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.

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