BHP Billiton PLC (NYSE: BBL) and Yamana Gold (NYSE:AUY) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Institutional and Insider Ownership

4.1% of BHP Billiton PLC shares are held by institutional investors. Comparatively, 42.6% of Yamana Gold shares are held by institutional investors. 2.7% of Yamana Gold shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares BHP Billiton PLC and Yamana Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BHP Billiton PLC N/A N/A N/A
Yamana Gold -20.19% 0.71% 0.37%

Dividends

BHP Billiton PLC pays an annual dividend of $1.66 per share and has a dividend yield of 4.3%. Yamana Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.7%. Yamana Gold pays out -5.0% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares BHP Billiton PLC and Yamana Gold’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
BHP Billiton PLC $38.29 billion 1.07 $5.89 billion N/A N/A
Yamana Gold $1.79 billion 1.42 -$307.90 million ($0.40) -6.70

BHP Billiton PLC has higher revenue and earnings than Yamana Gold.

Analyst Recommendations

This is a breakdown of current ratings for BHP Billiton PLC and Yamana Gold, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BHP Billiton PLC 1 2 1 0 2.00
Yamana Gold 1 6 2 0 2.11

BHP Billiton PLC currently has a consensus target price of $38.00, suggesting a potential downside of 2.19%. Yamana Gold has a consensus target price of $3.54, suggesting a potential upside of 32.00%. Given Yamana Gold’s stronger consensus rating and higher probable upside, analysts clearly believe Yamana Gold is more favorable than BHP Billiton PLC.

Risk & Volatility

BHP Billiton PLC has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Yamana Gold has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Summary

Yamana Gold beats BHP Billiton PLC on 9 of the 14 factors compared between the two stocks.

About BHP Billiton PLC

BHP Billiton Plc is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. It extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. It manages product distribution through its global logistics chain, including freight and pipeline transportation. It sells its products through direct supply agreements with its customers and on global commodity exchanges.

About Yamana Gold

Yamana Gold Inc. is a gold producer with gold production, gold development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. The Company’s segments include Chapada mine in Brazil; El Penon mine in Chile; Canadian Malartic mine in Canada; Gualcamayo mine in Argentina; Minera Florida mine in Chile; Jacobina mine in Brazil; Brio Gold Inc. (Brio Gold), and Corporate and other. The Company’s development projects include Cerro Moro, Argentina; Agua Rica, Argentina, and Gualcamayo, Argentina. Its exploration projects include Chapada, Brazil; El Penon, Chile; Gualcamayo, Argentina; Minera Florida, Chile; Jacobina, Brazil; Cerro Moro, Argentina; Canadian Malartic Corporation, Canada; Monument Bay, Canada; Brio Gold Exploration; Pilar, Brazil; Fazenda Brasileiro, Brazil; RDM, Brazil, and C1 Santa Luz, Brazil.

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