Harmony Gold Mining Company Limited (NYSE: HMY) and Franco-Nevada Corporation (NYSE:FNV) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitabiliy and analyst recommendations.
This table compares Harmony Gold Mining Company Limited and Franco-Nevada Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Harmony Gold Mining Company Limited||N/A||N/A||N/A|
Insider and Institutional Ownership
31.7% of Harmony Gold Mining Company Limited shares are held by institutional investors. Comparatively, 63.5% of Franco-Nevada Corporation shares are held by institutional investors. 16.0% of Harmony Gold Mining Company Limited shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Harmony Gold Mining Company Limited pays an annual dividend of $0.07 per share and has a dividend yield of 3.9%. Franco-Nevada Corporation pays an annual dividend of $0.92 per share and has a dividend yield of 1.2%. Franco-Nevada Corporation pays out 119.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Harmony Gold Mining Company Limited has raised its dividend for 4 consecutive years. Harmony Gold Mining Company Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Harmony Gold Mining Company Limited and Franco-Nevada Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Harmony Gold Mining Company Limited||$1.47 billion||0.54||$310.57 million||N/A||N/A|
|Franco-Nevada Corporation||$650.10 million||20.93||$508.00 million||$0.77||97.79|
Franco-Nevada Corporation has higher revenue, but lower earnings than Harmony Gold Mining Company Limited.
This is a breakdown of recent ratings for Harmony Gold Mining Company Limited and Franco-Nevada Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Harmony Gold Mining Company Limited||3||2||0||0||1.40|
Franco-Nevada Corporation has a consensus target price of $75.60, indicating a potential upside of 0.40%. Given Franco-Nevada Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Franco-Nevada Corporation is more favorable than Harmony Gold Mining Company Limited.
Risk & Volatility
Harmony Gold Mining Company Limited has a beta of -1.95, meaning that its share price is 295% less volatile than the S&P 500. Comparatively, Franco-Nevada Corporation has a beta of -0.03, meaning that its share price is 103% less volatile than the S&P 500.
Franco-Nevada Corporation beats Harmony Gold Mining Company Limited on 10 of the 15 factors compared between the two stocks.
Harmony Gold Mining Company Limited Company Profile
Harmony Gold Mining Company Limited, through its subsidiaries, is engaged in gold mining and related activities, including exploration, extraction and processing. The Company’s segments include South Africa Underground, Surface, and International. The South Africa Underground segment includes Kusasalethu, Doornkop, Phakisa, Tshepong, Masimong, Target 1, Bambanani, Joel, and Unisel. The Surface segment comprises the Company’s other surface operations. The Company’s International segment comprises Hidden Valley Project. The Company has operations in South Africa and Papua New Guinea (PNG). Harmony’s international operations and assets in Papua New Guinea (PNG) includes one open pit mine (Hidden Valley) and several exploration tenements in PNG. In addition, they own 50% of the significant Golpu project in a joint venture in PNG. The Company’s principal product is the Gold bullion. The Company’s exploration projects include Golpu project and Kili Teke prospect. The Company has approximately nine underground mines, one open pit operation and several surface sources in South Africa. The Company’s subsidiaries include Lydenburg Exploration Limited, Tswelopele Beneficiation Operation (TBO) and Harmony Copper Limited.
Franco-Nevada Corporation Company Profile
Franco-Nevada Corporation (Franco-Nevada) is a gold-focused royalty and stream company. The Company has interests in silver, platinum group metals, oil and gas and other resource assets. The Company is engaged in resource sector royalty/stream acquisitions and management activities. It has a portfolio of properties in the United States, Canada, Mexico, Peru, Chile and Africa. Its properties in the United States include Goldstrike, Stillwater, Gold Quarry, Marigold, Fire Creek/Midas, Bald Mountain, South Arturo and Other. Its properties in Canada include Sudbury, Detour Lake, Golden Highway, Musselwhite, Hemlo, Kirkland Lake, Timmins West, Canadian Malartic and Other. Its properties in Latin America include Antapaccay, Antamina, Candelaria, Guadalupe-Palmarejo and Other. Its properties in Rest of World include Mine Waste Solutions (MWS), Sabodala, Subika, Tasiast, Karma, Duketon, Edikan and Other.
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