Agnico Eagle Mines Limited (AEM) vs. Newmont Mining Corporation (NYSE:NEM) Head-To-Head Analysis

Agnico Eagle Mines Limited (NYSE: AEM) and Newmont Mining Corporation (NYSE:NEM) are both large-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Analyst Recommendations

This is a summary of current ratings and target prices for Agnico Eagle Mines Limited and Newmont Mining Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agnico Eagle Mines Limited 1 3 6 0 2.50
Newmont Mining Corporation 1 5 11 0 2.59

Agnico Eagle Mines Limited currently has a consensus target price of $55.36, suggesting a potential upside of 18.23%. Newmont Mining Corporation has a consensus target price of $41.93, suggesting a potential upside of 17.03%. Given Agnico Eagle Mines Limited’s higher possible upside, equities analysts clearly believe Agnico Eagle Mines Limited is more favorable than Newmont Mining Corporation.

Insider & Institutional Ownership

60.3% of Agnico Eagle Mines Limited shares are owned by institutional investors. Comparatively, 82.2% of Newmont Mining Corporation shares are owned by institutional investors. 0.5% of Agnico Eagle Mines Limited shares are owned by insiders. Comparatively, 0.3% of Newmont Mining Corporation shares are owned 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.

Valuation & Earnings

This table compares Agnico Eagle Mines Limited and Newmont Mining Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Agnico Eagle Mines Limited $2.21 billion 4.90 $932.83 million $1.09 42.95
Newmont Mining Corporation $7.11 billion 2.69 $2.76 billion ($0.90) -39.81

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

Dividends

Agnico Eagle Mines Limited pays an annual dividend of $0.40 per share and has a dividend yield of 0.9%. Newmont Mining Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Agnico Eagle Mines Limited pays out 36.7% of its earnings in the form of a dividend. Newmont Mining Corporation pays out -22.2% 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. Newmont Mining Corporation has increased its dividend for 5 consecutive years.

Volatility & Risk

Agnico Eagle Mines Limited has a beta of -0.67, indicating that its stock price is 167% less volatile than the S&P 500. Comparatively, Newmont Mining Corporation has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500.

Profitability

This table compares Agnico Eagle Mines Limited and Newmont Mining Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agnico Eagle Mines Limited 11.32% 5.38% 3.40%
Newmont Mining Corporation -6.73% 6.67% 3.82%

Summary

Newmont Mining Corporation beats Agnico Eagle Mines Limited on 10 of the 16 factors compared between the two stocks.

Agnico Eagle Mines Limited Company Profile

Agnico Eagle Mines Limited is a gold producer with mining operations in northwestern Quebec, northern Mexico, northern Finland and Nunavut and exploration activities in Canada, Europe, Latin America and the United States. The Company operates through three business units. The Northern Business consists of its operations in Canada and Finland. The Company’s Canadian properties include the LaRonde mine, the Lapa mine, the Goldex mine, the Meadowbank mine and the Meliadine project, and Canadian Malartic Mine. The operations in Finland include the Kittila mine. The Southern Business consists of its operations in Mexico. Its Pinos Altos mine includes the Creston Mascota deposit. The La India mine is owned by its indirect subsidiary. Its Exploration group focuses on the identification of new mineral reserves and mineral resources, and new development opportunities in gold producing regions. Its exploration activities are concentrated in Canada, Europe, Latin America and the United States.

Newmont Mining Corporation Company Profile

Newmont Mining Corporation is a mining company, which is focused on the production of and exploration for gold and copper. The Company is primarily a gold producer with operations and/or assets in the United States, Australia, Peru, Ghana and Suriname. The Company’s segments include North America, South America, Asia Pacific and Africa. The Company’s North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in the state of Nevada, and Cripple Creek &Victor (CC&V) in the state of Colorado, in the United States. The Company’s South America segment consists primarily of Yanacocha in Peru and Merian in Suriname. The Company’s Asia Pacific segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Company’s Africa segment consists primarily of Ahafo and Akyem in Ghana. As of December 31, 2016, it had gold reserves of 68.5 million ounces and an aggregate land position of approximately 23,000 square miles (59,000 square kilometers).

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