Newmont (NYSE:NEM) vs. Hecla Mining (NYSE:HL) Critical Analysis

Hecla Mining (NYSE:HL) and Newmont (NYSE:NEM) are both large-cap materials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Institutional and Insider Ownership

63.0% of Hecla Mining shares are held by institutional investors. Comparatively, 68.8% of Newmont shares are held by institutional investors. 0.7% of Hecla Mining shares are held by company insiders. Comparatively, 0.1% of Newmont shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Hecla Mining and Newmont’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hecla Mining	20.84%	18.91%	14.58%
Newmont	33.36%	29.10%	17.68%

Risk & Volatility

Hecla Mining has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Newmont has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Dividends

Hecla Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Newmont pays an annual dividend of $1.04 per share and has a dividend yield of 0.9%. Hecla Mining pays out 2.0% of its earnings in the form of a dividend. Newmont pays out 13.1% 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.

Analyst Recommendations

This is a breakdown of current ratings for Hecla Mining and Newmont, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hecla Mining	1	6	3	0	2.20
Newmont	0	3	19	2	2.96

Hecla Mining presently has a consensus price target of $23.34, indicating a potential upside of 42.50%. Newmont has a consensus price target of $134.26, indicating a potential upside of 18.22%. Given Hecla Mining’s higher probable upside, equities research analysts plainly believe Hecla Mining is more favorable than Newmont.

Valuation and Earnings

This table compares Hecla Mining and Newmont”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hecla Mining	$1.42 billion	7.73	$321.71 million	$0.49	33.43
Newmont	$22.67 billion	5.28	$7.08 billion	$7.92	14.34

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

Summary

Newmont beats Hecla Mining on 11 of the 17 factors compared between the two stocks.

About Hecla Mining

Hecla Mining Company, together with its subsidiaries, provides precious and base metal properties in the United States, Canada, Japan, Korea, and China. The company mines for silver, gold, lead, and zinc concentrates, as well as carbon material containing silver and gold for custom smelters, metal traders, and third-party processors; and doré containing silver and gold. It flagship project is the Greens Creek mine located on Admiralty Island in southeast Alaska. Hecla Mining Company was incorporated in 1891 and is headquartered in Coeur d'Alene, Idaho.

About Newmont

Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana. The company was founded in 1916 and is headquartered in Denver, Colorado.