Contrasting Yamana Gold (NYSE:AUY) & Agnico Eagle Mines (AEM)

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Yamana Gold (NYSE:AUY) and Agnico Eagle Mines (NYSE:AEM) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Yamana Gold and Agnico Eagle Mines, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yamana Gold 1 4 7 0 2.50
Agnico Eagle Mines 0 3 11 0 2.79

Yamana Gold currently has a consensus price target of $3.46, suggesting a potential upside of 42.56%. Agnico Eagle Mines has a consensus price target of $52.20, suggesting a potential upside of 31.16%. Given Yamana Gold’s higher possible upside, research analysts plainly believe Yamana Gold is more favorable than Agnico Eagle Mines.

Earnings & Valuation

This table compares Yamana Gold and Agnico Eagle Mines’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Yamana Gold $1.80 billion 1.28 -$194.40 million $0.08 30.38
Agnico Eagle Mines $2.24 billion 4.16 $243.88 million $1.11 35.86

Agnico Eagle Mines has higher revenue and earnings than Yamana Gold. Yamana Gold is trading at a lower price-to-earnings ratio than Agnico Eagle Mines, indicating that it is currently the more affordable of the two stocks.

Dividends

Yamana Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.8%. Agnico Eagle Mines pays an annual dividend of $0.44 per share and has a dividend yield of 1.1%. Yamana Gold pays out 25.0% of its earnings in the form of a dividend. Agnico Eagle Mines pays out 39.6% 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. Agnico Eagle Mines has increased its dividend for 7 consecutive years. Agnico Eagle Mines is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Yamana Gold has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, Agnico Eagle Mines has a beta of -0.69, suggesting that its stock price is 169% less volatile than the S&P 500.

Profitability

This table compares Yamana Gold and Agnico Eagle Mines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yamana Gold -23.32% 3.46% 1.74%
Agnico Eagle Mines 4.60% 1.75% 1.07%

Insider & Institutional Ownership

43.1% of Yamana Gold shares are owned by institutional investors. Comparatively, 60.2% of Agnico Eagle Mines shares are owned by institutional investors. 2.7% of Yamana Gold shares are owned by insiders. Comparatively, 0.5% of Agnico Eagle Mines 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.

Summary

Agnico Eagle Mines beats Yamana Gold on 11 of the 17 factors compared between the two stocks.

About Yamana Gold

Yamana Gold Inc. operates as a gold producer with gold production, gold development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile, and Argentina. The company primarily sells precious metals, including gold, silver, and copper. It also holds an option to earn a 70% ownership interest in the TPK property, a gold-silver-copper property located in northwestern Ontario. The company was formerly known as Yamana Resources Inc. and changed its name to Yamana Gold Inc. in July 2003. Yamana Gold Inc. was founded in 1980 and is based in Toronto, Canada.

About Agnico Eagle Mines

Agnico Eagle Mines Limited engages in the exploration, development, and production of mineral properties in Canada, Mexico, and Finland. The company operates through Northern Business and Southern Business segments. It primarily produces and sells gold deposit, as well as explores for silver, zinc, and copper deposits. The company's flagship property is the LaRonde mine located in the Abitibi region of northwestern Quebec, Canada. As of December 31, 2017, Its LaRonde mine had a proven and probable mineral reserve of approximately 2.7 million ounces of gold. The company is also involved in exploration activities in Canada, Europe, Latin America, and the United States. Agnico Eagle Mines Limited was founded in 1953 and is headquartered in Toronto, Canada.

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