Reviewing Centerra Gold (NYSE:CGAU) and Dundee Precious Metals (OTCMKTS:DPMLF)

Dundee Precious Metals (OTCMKTS:DPMLF) and Centerra Gold (NYSE:CGAU) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Dividends

Dundee Precious Metals pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. Centerra Gold pays an annual dividend of $0.20 per share and has a dividend yield of 2.6%. Dundee Precious Metals pays out 11.4% of its earnings in the form of a dividend. Centerra Gold pays out 60.6% 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.

Profitability

This table compares Dundee Precious Metals and Centerra Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dundee Precious Metals	37.07%	21.79%	18.98%
Centerra Gold	6.21%	9.12%	6.69%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Dundee Precious Metals and Centerra Gold, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dundee Precious Metals	0	0	1	1	3.50
Centerra Gold	0	3	4	2	2.89

Centerra Gold has a consensus price target of $13.00, indicating a potential upside of 67.85%. Given Centerra Gold’s higher probable upside, analysts plainly believe Centerra Gold is more favorable than Dundee Precious Metals.

Institutional & Insider Ownership

55.4% of Centerra Gold shares are held by institutional investors. 0.3% of Dundee Precious Metals shares are held by insiders. Comparatively, 0.2% of Centerra Gold shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Dundee Precious Metals and Centerra Gold”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dundee Precious Metals	$606.99 million	5.12	$235.88 million	$1.40	13.30
Centerra Gold	$1.21 billion	1.30	$80.39 million	$0.33	23.47

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

Volatility and Risk

Dundee Precious Metals has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, Centerra Gold has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.

Summary

Dundee Precious Metals beats Centerra Gold on 9 of the 17 factors compared between the two stocks.

About Dundee Precious Metals

Dundee Precious Metals Inc., a gold mining company, engages in the acquisition, exploration, development, mining, and processing of precious metals. The company primarily explores for gold, copper, and silver deposits. It holds a portfolio of projects located in Bulgaria, Namibia, Serbia, and Ecuador. The company is based in Toronto, Canada.

About Centerra Gold

Centerra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects are the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt gold mine located in Turkey. The company was incorporated in 2002 and is based in Toronto, Canada.