Randgold Resources Limited (GOLD) & Harmony Gold Mining Company Limited (HMY) Critical Analysis

Randgold Resources Limited (NASDAQ: GOLD) and Harmony Gold Mining Company Limited (NYSE:HMY) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Dividends

Randgold Resources Limited pays an annual dividend of $0.98 per share and has a dividend yield of 0.9%. Harmony Gold Mining Company Limited pays an annual dividend of $0.07 per share and has a dividend yield of 3.4%. Randgold Resources Limited pays out 31.3% of its earnings in the form of a dividend.

Profitability

This table compares Randgold Resources Limited and Harmony Gold Mining Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Randgold Resources Limited 22.75% 7.89% 7.33%
Harmony Gold Mining Company Limited N/A N/A N/A

Institutional & Insider Ownership

35.6% of Randgold Resources Limited shares are owned by institutional investors. Comparatively, 25.1% of Harmony Gold Mining Company Limited shares are owned by institutional investors. 16.0% of Harmony Gold Mining Company Limited shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Randgold Resources Limited and Harmony Gold Mining Company Limited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Randgold Resources Limited 1 7 6 0 2.36
Harmony Gold Mining Company Limited 2 3 0 0 1.60

Randgold Resources Limited currently has a consensus target price of $102.33, suggesting a potential downside of 1.85%. Given Randgold Resources Limited’s stronger consensus rating and higher possible upside, research analysts plainly believe Randgold Resources Limited is more favorable than Harmony Gold Mining Company Limited.

Volatility and Risk

Randgold Resources Limited has a beta of 0.02, meaning that its stock price is 98% less volatile than the S&P 500. Comparatively, Harmony Gold Mining Company Limited has a beta of -1.94, meaning that its stock price is 294% less volatile than the S&P 500.

Earnings and Valuation

This table compares Randgold Resources Limited and Harmony Gold Mining Company Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Randgold Resources Limited $1.32 billion 7.43 $698.29 million $3.13 33.31
Harmony Gold Mining Company Limited $1.45 billion 0.62 $311.56 million N/A N/A

Randgold Resources Limited has higher revenue, but lower earnings than Harmony Gold Mining Company Limited.

Summary

Randgold Resources Limited beats Harmony Gold Mining Company Limited on 10 of the 14 factors compared between the two stocks.

About Randgold Resources Limited

Randgold Resources Limited is engaged in gold mining, exploration and related activities. The Company’s activities are focused on West and Central Africa. The Company operates through the gold mining segment. The Company operates various mines, such as Morila, Loulo, Gounkoto, Tongon and Kibali. The Company is exploring in African countries, such as Mali, Senegal, Cote d’Ivoire and the Democratic Republic of Congo (DRC). The Company also holds an interest in the Massawa project. The Company holds Morila Limited, which holds interests in the Morila mine in Mali. As of December 31, 2016, Morila mine has produced 122,370 ounces (oz) of gold. The Company holds a controlling interest in the Loulo mine, located in Mali, through Societe des Mines de Loulo SA (Loulo). The Loulo mine is mining from over two underground mines. As of December 31, 2016, Loulo mine has produced 350,604 oz of gold. It has a controlling interest in the Gounkoto mine through Societe des Mines de Gounkoto SA.

About Harmony Gold Mining Company Limited

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, Unisel and Target 3. 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). 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.

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