Analyzing Rio Tinto (RIO) and Seabridge Gold (SA)

Rio Tinto (NYSE: RIO) and Seabridge Gold (NYSE:SA) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Institutional & Insider Ownership

7.2% of Rio Tinto shares are owned by institutional investors. Comparatively, 27.5% of Seabridge Gold shares are owned by institutional investors. 12.8% of Seabridge Gold shares are owned 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 and Earnings

This table compares Rio Tinto and Seabridge Gold’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rio Tinto $33.78 billion 2.03 $4.62 billion N/A N/A
Seabridge Gold N/A N/A -$5.50 million ($0.09) -120.00

Rio Tinto has higher revenue and earnings than Seabridge Gold.

Volatility & Risk

Rio Tinto has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Seabridge Gold has a beta of -0.42, suggesting that its share price is 142% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Rio Tinto and Seabridge Gold, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rio Tinto 1 6 8 0 2.47
Seabridge Gold 0 0 0 0 N/A

Rio Tinto currently has a consensus target price of $50.12, suggesting a potential downside of 0.88%. Given Rio Tinto’s higher possible upside, equities analysts clearly believe Rio Tinto is more favorable than Seabridge Gold.

Profitability

This table compares Rio Tinto and Seabridge Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rio Tinto N/A N/A N/A
Seabridge Gold N/A -2.25% -2.07%

Dividends

Rio Tinto pays an annual dividend of $2.37 per share and has a dividend yield of 4.7%. Seabridge Gold does not pay a dividend.

Summary

Rio Tinto beats Seabridge Gold on 8 of the 10 factors compared between the two stocks.

Rio Tinto Company Profile

Rio Tinto plc is a mining and metals company. The Company’s business is finding, mining and processing mineral resources. The Company’s segments include Iron Ore, Aluminium, Copper & Diamonds, Energy & Minerals and Other Operations. The Company operates an iron ore business, supplying the global seaborne iron ore trade. Its Iron Ore product operations are located in the Pilbara region of Western Australia. The Aluminium business includes bauxite mines, alumina refineries and aluminum smelters. Its bauxite mines are located in Australia, Brazil and Guinea. The Copper & Diamonds segment has managed operations in Australia, Canada, Mongolia and the United States, and non-managed operations in Chile and Indonesia. The Energy & Minerals segment consists of mining, refining and marketing operations in over 10 countries, across six sectors: borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium.

Seabridge Gold Company Profile

Seabridge Gold Inc. (Seabridge) is a development-stage company. The Company is engaged in the acquisition and exploration of gold properties located in North America. As of December 31, 2016, the Company owned six properties with gold resources. Its material properties are its Kerr-Sulphurets-Mitchell (KSM) Project and its Courageous Lake Project. Its KSM Project is located within the Iskut-Stikine region of British Columbia, approximately 21 kilometers south-southeast of the former Eskay Creek Mine and approximately 65 kilometers north-northwest of Stewart, British Columbia. As of December 31, 2016, the KSM property consisted of three discontinuous claim blocks. These claim blocks are referred to as the KSM claim group; the Seabee/Tina claims, and the KSM placer claim block. As of December 31, 2016, the two claim blocks (KSM and Seabee/Tina) contained two mineral leases and 73 mineral claims, consisting of both cell and legacy claims.

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