Critical Analysis: Iamgold (NYSE:IAG) and Barrick Gold (NYSE:GOLD)

Iamgold (NYSE:IAG) and Barrick Gold (NYSE:GOLD) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Volatility & Risk

Iamgold has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Barrick Gold has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.

Insider & Institutional Ownership

51.1% of Iamgold shares are held by institutional investors. Comparatively, 63.1% of Barrick Gold shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Iamgold and Barrick Gold’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Iamgold $1.07 billion 1.89 -$412.60 million ($0.04) -106.25
Barrick Gold $9.72 billion 5.49 $3.97 billion $0.51 58.80

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Iamgold and Barrick Gold, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Iamgold 2 6 5 0 2.23
Barrick Gold 0 2 2 0 2.50

Iamgold currently has a consensus target price of $5.47, indicating a potential upside of 28.66%. Barrick Gold has a consensus target price of $28.68, indicating a potential downside of 4.38%. Given Iamgold’s higher possible upside, equities analysts clearly believe Iamgold is more favorable than Barrick Gold.

Profitability

This table compares Iamgold and Barrick Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Iamgold -32.46% 0.47% 0.30%
Barrick Gold 39.00% 4.24% 2.83%

Summary

Barrick Gold beats Iamgold on 10 of the 13 factors compared between the two stocks.

About Iamgold

IAMGOLD Corporation explores for, develops, and operates gold mining properties in North and South America, and West Africa. The company owns interests in the Rosebel mine located in Suriname, South America; the Essakane mine in Burkina Faso, West Africa; the Westwood mine in Quebec, Canada; and the Sadiola mine located in Mali, West Africa. Its exploration and development projects include the Boto gold project in Senegal; the Diakha-Siribaya gold project in Mali; the Pitangui project in Brazil; the Côté gold project in Ontario; the Nelligan and Monster Lake projects in Quebec; the Rouyn-Yorbeau project in Quebec; the Loma Larga, a gold, silver, and copper project in southern Ecuador; and the Eastern Borosi project in Northeast Nicaragua. IAMGOLD Corporation was incorporated in 1990 and is headquartered in Toronto, Canada.

About Barrick Gold

Barrick Gold Corporation engages in the exploration and development of mineral properties. It primarily explores for gold and copper deposits. The company holds a 50% interest in the Veladero mine located in the San Juan Province of Argentina; 50% interest in the KCGM, a gold mine located in Australia; 95% interest in Porgera, a gold mine located in Papua New Guinea; 50% interest in the Zalda­var, a copper mine located in Chile; and 50% interest in the Jabal Sayid, a copper mine located in Saudi Arabia. It also owns gold mines and exploration properties in Africa; and gold projects located in South America and North America. Barrick Gold Corporation has strategic cooperation agreement with Shandong Gold Group Co. Ltd. The company was founded in 1983 and is headquartered in Toronto, Canada.

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