Analyzing Cameco (NYSE:CCJ) and Paladin Energy (OTCMKTS:PALAF)

Cameco (NYSE:CCJ) and Paladin Energy (OTCMKTS:PALAF) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cameco and Paladin Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cameco	0	5	11	0	2.69
Paladin Energy	1	0	0	0	1.00

Cameco presently has a consensus price target of $147.42, indicating a potential upside of 37.67%. Paladin Energy has a consensus price target of $9.70, indicating a potential upside of 42.02%. Given Paladin Energy’s higher probable upside, analysts plainly believe Paladin Energy is more favorable than Cameco.

Volatility and Risk

Cameco has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, Paladin Energy has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500.

Profitability

This table compares Cameco and Paladin Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cameco	18.38%	11.05%	7.65%
Paladin Energy	-7.08%	-1.90%	-1.44%

Valuation & Earnings

This table compares Cameco and Paladin Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cameco	$2.49 billion	18.72	$421.96 million	$1.08	99.15
Paladin Energy	$177.68 million	17.27	-$44.64 million	($0.05)	-136.60

Cameco has higher revenue and earnings than Paladin Energy. Paladin Energy is trading at a lower price-to-earnings ratio than Cameco, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

70.2% of Cameco shares are held by institutional investors. Comparatively, 0.0% of Paladin Energy shares are held by institutional investors. 1.0% of Cameco shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Cameco beats Paladin Energy on 12 of the 14 factors compared between the two stocks.

About Cameco

Cameco Corporation provides uranium for the generation of electricity. It operates through Uranium, Fuel Services, Westinghouse segments. The Uranium segment is involved in the exploration for, mining, and milling, purchase, and sale of uranium concentrate. The Fuel Services segment engages in the refining, conversion, and fabrication of uranium concentrate, as well as the purchase and sale of conversion services. This segment also produces CANDU reactor fuel bundles and other reactor components. The company offers nuclear fuel processing services. The Westinghouse segment engages in the manufacture of nuclear reactor technology original equipment. This segment provides products and services to commercial utilities and government agencies; and outage and maintenance services, engineering support, instrumentation and controls equipment, plant modification, and components and parts to nuclear reactors. It sells its uranium and fuel services to nuclear utilities in the Americas, Europe, and Asia. Cameco Corporation was incorporated in 1987 and is headquartered in Saskatoon, Canada.

About Paladin Energy

Paladin Energy Ltd develops, explores for, owns, and operates uranium mines in Australia, Canada, and Africa. The company operates through Exploration, Namibia, and Australia segments. Its flagship project is the Langer Heinrich mine located in the Namib Desert in Namibia. The company was formerly known as Paladin Resources Ltd and changed its name to Paladin Energy Limited in November 2007. Paladin Energy Ltd was incorporated in 1993 and is headquartered in Perth, Australia.