New Gold (NGD) versus Freeport-McMoran (NYSE:FCX) Head-To-Head Analysis

New Gold (NYSE: NGD) and Freeport-McMoran (NYSE:FCX) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares New Gold and Freeport-McMoran’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Gold 22.12% 6.89% 3.73%
Freeport-McMoran 5.97% 10.45% 2.60%

Institutional & Insider Ownership

69.5% of Freeport-McMoran shares are held by institutional investors. 1.4% of Freeport-McMoran shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares New Gold and Freeport-McMoran’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
New Gold $704.10 million 2.82 $282.10 million N/A N/A
Freeport-McMoran $15.31 billion 1.32 $5.20 billion $0.71 19.66

Freeport-McMoran has higher revenue and earnings than New Gold.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for New Gold and Freeport-McMoran, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Gold 1 4 3 0 2.25
Freeport-McMoran 3 9 2 0 1.93

New Gold currently has a consensus price target of $3.88, suggesting a potential upside of 12.89%. Freeport-McMoran has a consensus price target of $13.77, suggesting a potential downside of 1.37%. Given New Gold’s stronger consensus rating and higher probable upside, equities analysts clearly believe New Gold is more favorable than Freeport-McMoran.

Summary

New Gold beats Freeport-McMoran on 7 of the 12 factors compared between the two stocks.

New Gold Company Profile

New Gold Inc. is an intermediate gold mining company. The Company is engaged in the development and operation of mineral properties. Its segments include New Afton, Mesquite, Peak Mines, Cerro San Pedro, Corporate and Other. It has operating mines in Canada, the United States, Australia and Mexico; development projects in Canada, and a stream on gold production from a development property in Chile. Its development projects include Rainy River and Blackwater projects, which are located in Canada. Its Rainy River project is a gold project located approximately 65 kilometers northwest of Fort Frances in northwestern Ontario, Canada. The Rainy River comprises approximately 192 square kilometers of various rights and claims. The Blackwater Project is located approximately 160 kilometers southwest of the city of Prince George in central British Columbia, Canada and 110 kilometers southwest of the town of Vanderhoof. The Blackwater project covers an area of over 1,000 square kilometers.

Freeport-McMoran Company Profile

Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.

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