Contrasting Yamana Gold (AUY) and Pan American Silver (NASDAQ:PAAS)

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Yamana Gold (NYSE: AUY) and Pan American Silver (NASDAQ:PAAS) are both mid-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Risk & Volatility

Yamana Gold has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Pan American Silver has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Dividends

Yamana Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.7%. Pan American Silver pays an annual dividend of $0.14 per share and has a dividend yield of 0.8%. Yamana Gold pays out 25.0% of its earnings in the form of a dividend. Pan American Silver pays out 27.5% 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Yamana Gold and Pan American Silver, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yamana Gold 0 3 7 0 2.70
Pan American Silver 0 1 11 0 2.92

Yamana Gold presently has a consensus target price of $3.70, indicating a potential upside of 22.52%. Pan American Silver has a consensus target price of $21.56, indicating a potential upside of 19.95%. Given Yamana Gold’s higher probable upside, research analysts plainly believe Yamana Gold is more favorable than Pan American Silver.

Earnings & Valuation

This table compares Yamana Gold and Pan American Silver’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Yamana Gold $1.80 billion 1.59 -$194.40 million $0.08 37.75
Pan American Silver $816.83 million 3.37 $120.99 million $0.51 35.24

Pan American Silver has lower revenue, but higher earnings than Yamana Gold. Pan American Silver is trading at a lower price-to-earnings ratio than Yamana Gold, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Yamana Gold and Pan American Silver’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yamana Gold -18.50% 2.33% 1.19%
Pan American Silver 18.19% 6.35% 4.89%

Insider & Institutional Ownership

43.3% of Yamana Gold shares are held by institutional investors. Comparatively, 49.6% of Pan American Silver shares are held by institutional investors. 2.7% of Yamana Gold shares are held by company insiders. Comparatively, 12.9% of Pan American Silver shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Pan American Silver beats Yamana Gold on 11 of the 16 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. It primarily sells precious metals, including gold, silver, and copper. 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 Pan American Silver

Pan American Silver Corp., together with its subsidiaries, engages in exploration, extraction, processing, refining, and reclamation of silver mines. The company owns and operates silver mines located in Peru, Mexico, Argentina, and Bolivia. It also produces and sells gold, zinc, lead, and copper. The company holds interests in the La Colorada, Dolores, Alamo Dorado, Huaron, Morococha, Manantial Espejo, and San Vicente mines. Pan American Silver Corp. was founded in 1979 and is headquartered in Vancouver, Canada.

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