Kinross Gold (NYSE:KGC) versus Vale (NYSE:VALE) Financial Review

Vale (NYSE:VALE) and Kinross Gold (NYSE:KGC) are both large-cap materials companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Risk and Volatility

Vale has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Kinross Gold has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Insider and Institutional Ownership

21.9% of Vale shares are held by institutional investors. Comparatively, 63.7% of Kinross Gold shares are held by institutional investors. 1.0% of Kinross Gold shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Vale and Kinross Gold”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vale	$38.40 billion	1.33	$2.35 billion	$0.15	75.23
Kinross Gold	$7.05 billion	3.45	$2.39 billion	$2.65	7.82

Kinross Gold has lower revenue, but higher earnings than Vale. Kinross Gold is trading at a lower price-to-earnings ratio than Vale, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Vale and Kinross Gold, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vale	1	10	3	0	2.14
Kinross Gold	0	2	14	1	2.94

Vale currently has a consensus price target of $14.96, indicating a potential upside of 32.55%. Kinross Gold has a consensus price target of $37.98, indicating a potential upside of 83.29%. Given Kinross Gold’s stronger consensus rating and higher possible upside, analysts plainly believe Kinross Gold is more favorable than Vale.

Profitability

This table compares Vale and Kinross Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vale	1.64%	16.54%	7.02%
Kinross Gold	37.62%	32.84%	23.49%

Dividends

Vale pays an annual dividend of $0.44 per share and has a dividend yield of 3.9%. Kinross Gold pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. Vale pays out 293.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinross Gold pays out 6.0% of its earnings in the form of a dividend.

Summary

Kinross Gold beats Vale on 14 of the 17 factors compared between the two stocks.

About Vale

Vale S.A. is a Brazilian mining and logistics company best known for producing iron ore and iron ore pellets, which are used in steelmaking. Its other products include nickel, copper, cobalt and manganese, serving customers in the steel, energy and technology industries. Founded in 1942 as Companhia Vale do Rio Doce, the company is headquartered in Rio de Janeiro. Its operations and projects span several countries, including Brazil, Canada and Indonesia. In addition to mining, Vale operates railways, ports and other logistics infrastructure that support the transportation of its products.

About Kinross Gold

Kinross Gold Corporation is a Toronto-based gold mining company engaged in the exploration, development and operation of gold mines. Its principal product is gold, with silver also produced at some operations. The company operates mines in the United States, Brazil, Chile and Mauritania. Its activities span the mining process, from identifying and developing mineral deposits to extracting and processing ore. Founded in 1993, Kinross has grown through acquisitions and the development of mining projects across the Americas and West Africa.