Primero Mining Corp (NYSE:PPP) vs. Harmony Gold Mining Company Limited (HMY) Critical Analysis

Primero Mining Corp (NYSE: PPP) and Harmony Gold Mining Company Limited (NYSE:HMY) are both small-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Risk and Volatility

Primero Mining Corp has a beta of -0.4, meaning that its share price is 140% less volatile than the S&P 500. Comparatively, Harmony Gold Mining Company Limited has a beta of -1.95, meaning that its share price is 295% less volatile than the S&P 500.

Dividends

Harmony Gold Mining Company Limited pays an annual dividend of $0.07 per share and has a dividend yield of 3.8%. Primero Mining Corp does not pay a dividend.

Profitability

This table compares Primero Mining Corp and Harmony Gold Mining Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Primero Mining Corp -299.62% -2.41% -1.67%
Harmony Gold Mining Company Limited N/A N/A N/A

Earnings and Valuation

This table compares Primero Mining Corp and Harmony Gold Mining Company Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Primero Mining Corp $206.32 million 0.18 $31.53 million ($2.39) -0.08
Harmony Gold Mining Company Limited $1.47 billion 0.56 $310.57 million N/A N/A

Harmony Gold Mining Company Limited has higher revenue and earnings than Primero Mining Corp.

Insider and Institutional Ownership

43.8% of Primero Mining Corp shares are owned by institutional investors. Comparatively, 31.7% of Harmony Gold Mining Company Limited shares are owned by institutional investors. 16.0% of Harmony Gold Mining Company Limited shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Primero Mining Corp and Harmony Gold Mining Company Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Primero Mining Corp 1 2 1 0 2.00
Harmony Gold Mining Company Limited 3 2 0 0 1.40

Primero Mining Corp presently has a consensus price target of $2.25, suggesting a potential upside of 1,084.21%. Given Primero Mining Corp’s stronger consensus rating and higher possible upside, research analysts clearly believe Primero Mining Corp is more favorable than Harmony Gold Mining Company Limited.

Summary

Harmony Gold Mining Company Limited beats Primero Mining Corp on 8 of the 13 factors compared between the two stocks.

About Primero Mining Corp

Primero Mining Corp. is a precious metals producer with operations in both Mexico and Canada. The Company is focused on building a portfolio of precious metals assets in the Americas through acquiring, exploring, developing and operating mineral resource properties. Its segments include San Dimas, Cerro del Gallo, Black Fox Complex and Corporate. It owns over two producing properties, including the San Dimas gold-silver mine, located in Mexico’s San Dimas district, and the Black Fox mine, located in the Township of Black River-Matheson, Ontario, Canada. It owns properties adjacent to the Black Fox mine, Grey Fox and Pike River, which together with the Black Fox mine and the Black Fox mill, located on the Stock Mill property, comprise the Black Fox Complex. It also owns over two exploration properties, including the Cerro del Gallo gold-silver-copper project, which is located in the state of Guanajuato in central Mexico, and Ventanas, which is located in Durango State, Mexico.

About Harmony Gold Mining Company Limited

Harmony Gold Mining Company Limited, through its subsidiaries, is engaged in gold mining and related activities, including exploration, extraction and processing. The Company’s segments include South Africa Underground, Surface, and International. The South Africa Underground segment includes Kusasalethu, Doornkop, Phakisa, Tshepong, Masimong, Target 1, Bambanani, Joel, and Unisel. The Surface segment comprises the Company’s other surface operations. The Company’s International segment comprises Hidden Valley Project. The Company has operations in South Africa and Papua New Guinea (PNG). Harmony’s international operations and assets in Papua New Guinea (PNG) includes one open pit mine (Hidden Valley) and several exploration tenements in PNG. In addition, they own 50% of the significant Golpu project in a joint venture in PNG. The Company’s principal product is the Gold bullion. The Company’s exploration projects include Golpu project and Kili Teke prospect. The Company has approximately nine underground mines, one open pit operation and several surface sources in South Africa. The Company’s subsidiaries include Lydenburg Exploration Limited, Tswelopele Beneficiation Operation (TBO) and Harmony Copper Limited.

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