Analyzing Barrick Gold (NYSE:GOLD) & Fresnillo (OTCMKTS:FNLPF)

Barrick Gold (NYSE:GOLD) and Fresnillo (OTCMKTS:FNLPF) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Insider and Institutional Ownership

62.9% of Barrick Gold shares are owned by institutional investors. 0.6% of Barrick Gold shares are owned by company 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.

Volatility and Risk

Barrick Gold has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Fresnillo has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barrick Gold	0	4	7	0	2.64
Fresnillo	0	1	0	1	3.00

Barrick Gold presently has a consensus target price of $24.82, indicating a potential upside of 55.16%. Given Barrick Gold’s higher probable upside, analysts plainly believe Barrick Gold is more favorable than Fresnillo.

Valuation and Earnings

This table compares Barrick Gold and Fresnillo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barrick Gold	$11.40 billion	2.44	$1.27 billion	$0.93	17.20
Fresnillo	$2.71 billion	2.22	$233.91 million	N/A	N/A

Barrick Gold has higher revenue and earnings than Fresnillo.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Barrick Gold	13.19%	5.82%	4.07%
Fresnillo	N/A	N/A	N/A

Dividends

Barrick Gold pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. Fresnillo pays an annual dividend of $0.13 per share and has a dividend yield of 1.6%. Barrick Gold pays out 43.0% of its earnings in the form of a dividend.

Summary

Barrick Gold beats Fresnillo on 11 of the 14 factors compared between the two stocks.

About Barrick Gold

Barrick Gold Corporation is a sector-leading gold and copper producer.  Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX.
 
In January 2019 Barrick merged with Randgold Resources and in July that year it combined its gold mines in Nevada, USA, with those of Newmont Corporation in a joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick. Nevada Gold Mines is the world’s largest gold mining complex.  Barrick owns and operates six Tier One gold mines:  Cortez, Carlin and Turquoise Ridge in Nevada, Loulo-Gounkoto in Mali, Kibali in the Democratic Republic of Congo and Pueblo Viejo in the Dominican Republic.
 
It has gold and copper mines and projects in 13 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia. Barrick’s diversified portfolio spans the world’s most prolific gold districts and is focused on high-margin, long life assets.

About Fresnillo

Fresnillo plc mines, develops, and produces non-ferrous minerals in Mexico. It operates through seven segments: Fresnillo, Saucito, Ciénega, Herradura, Noche Buena, San Julián, and Juanicipio. The company primarily explores for silver, gold, lead, and zinc concentrates. Its projects include the Fresnillo silver mine located in the state of Zacatecas; Saucito silver mine situated in the state of Zacatecas; Ciénega gold mine located in the state of Durango; Herradura gold mine situated in the state of Sonora; Noche Buena gold mine located in the state of Sonora; San Julián silver-gold mine situated on the border of Chihuahua/Durango states; and Juanicipio mine located in the state of Zacatecas. It also leases mining equipment; produces gold/silver doré bars; and provides administrative services. The company was founded in 1887 and is headquartered in Mexico City, Mexico. Fresnillo plc operates as a subsidiary of Industrias Peñoles, S.A.B. de C.V.