New Gold (NYSE:NGD – Get Rating) and Lithium Americas (NYSE:LAC – Get Rating) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.
Analyst Recommendations
This is a breakdown of recent ratings for New Gold and Lithium Americas, as provided by MarketBeat.
Get New Gold alerts:| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| New Gold | 0 | 0 | 0 | 0 | N/A |
| Lithium Americas | 0 | 1 | 11 | 0 | 2.92 |
Lithium Americas has a consensus target price of $40.70, indicating a potential upside of 48.70%. Given Lithium Americas' higher possible upside, analysts clearly believe Lithium Americas is more favorable than New Gold.
Risk and Volatility
New Gold has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, Lithium Americas has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500.Insider & Institutional Ownership
31.4% of New Gold shares are owned by institutional investors. Comparatively, 17.9% of Lithium Americas shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares New Gold and Lithium Americas' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| New Gold | 15.36% | 8.64% | 3.22% |
| Lithium Americas | N/A | -13.59% | -9.90% |
Earnings & Valuation
This table compares New Gold and Lithium Americas' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| New Gold | $745.50 million | 0.74 | $140.60 million | $0.17 | 4.76 |
| Lithium Americas | N/A | N/A | -$38.49 million | ($0.54) | -50.68 |
New Gold has higher revenue and earnings than Lithium Americas. Lithium Americas is trading at a lower price-to-earnings ratio than New Gold, indicating that it is currently the more affordable of the two stocks.
Summary
New Gold beats Lithium Americas on 9 of the 11 factors compared between the two stocks.
About New Gold
(Get Rating)
New Gold Inc., an intermediate gold mining company, engages in the exploration, development, and operation of mineral properties. It primarily explores for gold, silver, and copper deposits. The company's principal operating properties include 100% interests in the Rainy River mine located in Ontario, Canada; and New Afton mine situated in British Columbia, Canada. It also operates the Cerro San Pedro mine in San Luis Potosí, Mexico. The company was incorporated in 1980 and is headquartered in Toronto, Canada.
About Lithium Americas
(Get Rating)
Lithium Americas Corp. operates as a resource company in the United States and Argentina. The company explores for lithium deposits. It owns interests in the Cauchari-Olaroz project located in Jujuy province of Argentina; Thacker Pass project located in north-western Nevada; and Pastos Grandes project located in the Salta province of Argentina. The company was formerly known as Western Lithium USA Corporation and changed its name to Lithium Americas Corp. in March 2016. Lithium Americas Corp. was incorporated in 2007 and is headquartered in Vancouver, Canada.
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