Atlas Copco (OTCMKTS:ATLRF) versus New Gold (NYSE:NGD) Critical Review

Atlas Copco (OTCMKTS:ATLRF) and New Gold (NYSE:NGD) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Institutional & Insider Ownership

42.8% of New Gold shares are owned by institutional investors. 7.5% of Atlas Copco shares are owned by insiders. Comparatively, 0.2% of New Gold shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Atlas Copco and New Gold”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlas Copco	$4.26 million	1,509.69	-$72.56 million	N/A	N/A
New Gold	$1.24 billion	6.01	-$64.50 million	$0.32	29.47

New Gold has higher revenue and earnings than Atlas Copco.

Volatility & Risk

Atlas Copco has a beta of -0.45, suggesting that its share price is 145% less volatile than the S&P 500. Comparatively, New Gold has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Profitability

This table compares Atlas Copco and New Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atlas Copco	N/A	N/A	-51.79%
New Gold	11.10%	13.70%	6.31%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Atlas Copco and New Gold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlas Copco	0	0	0	0	0.00
New Gold	0	1	5	2	3.13

New Gold has a consensus price target of $8.18, suggesting a potential downside of 13.31%. Given New Gold’s stronger consensus rating and higher probable upside, analysts plainly believe New Gold is more favorable than Atlas Copco.

Summary

New Gold beats Atlas Copco on 11 of the 13 factors compared between the two stocks.

About Atlas Copco

Atlas Copco AB, together with its subsidiaries, provides productivity solutions. The company operates through Compressor Technique, Vacuum Technique, Industrial Technique, and Power Technique segments. It offers piston compressors, oil-free tooth and scroll compressors, rotary screw compressors, oil-free blowers, oil-free centrifugal compressors, gas and process compressors, air and gas treatment equipment, and medical air solutions primarily for use in the manufacturing and process industries. The company also provides oil-sealed rotary vane, dry, and liquid ring vacuum pumps; and turbomolecular and cryogenic pumps, as well as abatement and integrated systems for the semiconductor and scientific, chemical process, food packaging, and paper handling industries. In addition, it offers pneumatic, hydraulic, and electric assembly tools, as well as control systems and associated software for safety-critical tightening; self-pierce riveting tools, dispensing equipment for adhesives and sealants, and flow drill fastening equipment; material removal tools, drills, and other pneumatic products; and machine vision solutions for customers in the automotive and general industries. Further, the company provides portable compressors, boosters, generators, lighting towers, pumps, and construction and demolition tools for civil engineering, oil and gas, construction, manufacturing, exploration drilling, and demolition industries, as well as specialty rental services. It operates in North America, South America, Europe, Africa, the Middle East, Asia, and Oceania. The company was founded in 1873 and is headquartered in Nacka, Sweden.

About New Gold

New Gold Inc., an intermediate gold mining company, develops and operates of mineral properties in Canada. It primarily explores for gold, silver, and copper deposits. The company’s principal operating properties include 100% interest in the Rainy River mine located in Northwestern Ontario, Canada; and New Afton project situated in South-Central British Columbia. New Gold Inc. is headquartered in Toronto, Canada.