Agnico Eagle Mines (NYSE: HMY) and Harmony Gold Mining (NYSE:HMY) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and target prices for Agnico Eagle Mines and Harmony Gold Mining, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agnico Eagle Mines 0 2 10 0 2.83
Harmony Gold Mining 1 1 1 0 2.00

Agnico Eagle Mines presently has a consensus price target of $58.33, indicating a potential upside of 51.01%. Given Agnico Eagle Mines’ stronger consensus rating and higher possible upside, research analysts clearly believe Agnico Eagle Mines is more favorable than Harmony Gold Mining.

Profitability

This table compares Agnico Eagle Mines and Harmony Gold Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agnico Eagle Mines 6.84% 3.07% 1.90%
Harmony Gold Mining N/A N/A N/A

Insider and Institutional Ownership

59.0% of Agnico Eagle Mines shares are held by institutional investors. Comparatively, 30.5% of Harmony Gold Mining shares are held by institutional investors. 0.5% of Agnico Eagle Mines shares are held by company insiders. Comparatively, 16.0% of Harmony Gold Mining shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Agnico Eagle Mines and Harmony Gold Mining’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Agnico Eagle Mines $2.24 billion 4.02 $243.88 million $1.11 34.80
Harmony Gold Mining $1.42 billion 0.51 $17.00 million $0.21 7.81

Agnico Eagle Mines has higher revenue and earnings than Harmony Gold Mining. Harmony Gold Mining is trading at a lower price-to-earnings ratio than Agnico Eagle Mines, indicating that it is currently the more affordable of the two stocks.

Dividends

Agnico Eagle Mines pays an annual dividend of $0.44 per share and has a dividend yield of 1.1%. Harmony Gold Mining pays an annual dividend of $0.02 per share and has a dividend yield of 1.2%. Agnico Eagle Mines pays out 39.6% of its earnings in the form of a dividend. Harmony Gold Mining pays out 9.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Agnico Eagle Mines has raised its dividend for 6 consecutive years. Harmony Gold Mining is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Agnico Eagle Mines has a beta of -0.53, indicating that its stock price is 153% less volatile than the S&P 500. Comparatively, Harmony Gold Mining has a beta of -1.96, indicating that its stock price is 296% less volatile than the S&P 500.

Summary

Agnico Eagle Mines beats Harmony Gold Mining on 14 of the 17 factors compared between the two stocks.

About Agnico Eagle Mines

Agnico Eagle Mines Limited engages in the exploration, development, and production of mineral properties in Canada, Mexico, and Finland. The company operates through Northern Business and Southern Business segments. It primarily produces and sells gold deposit, as well as explores for silver, zinc, and copper deposits. The company's flagship property is the LaRonde mine located in the Abitibi region of northwestern Quebec, Canada. As of December 31, 2017, Its LaRonde mine had a proven and probable mineral reserve of approximately 2.7 million ounces of gold. The company is also involved in exploration activities in Canada, Europe, Latin America, and the United States. Agnico Eagle Mines Limited was founded in 1953 and is headquartered in Toronto, Canada.

About Harmony Gold Mining

Harmony Gold Mining Company Limited engages in the exploration and mining of gold in South Africa and Papua New Guinea. The company also explores for copper and silver deposits. It has nine underground operations; an open-pit mine; and various other surface operations in South Africa. The company owns interests in the Hidden Valley, an open-pit gold and silver mine; the Wafi Golpu project in Morobe province; and the Kili Teke gold-copper exploration project in Papua New Guinea. Harmony Gold Mining Company Limited was incorporated in 1950 and is based in Randfontein, South Africa.

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