NovaGold Resources (NYSE:NG – Get Rating) and Gatos Silver (NYSE:GATO – Get Rating) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.
Earnings and Valuation
This table compares NovaGold Resources and Gatos Silver’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NovaGold Resources | N/A | N/A | -$53.34 million | ($0.16) | -38.81 |
| Gatos Silver | N/A | N/A | -$43.44 million | ($0.37) | -19.51 |
NovaGold Resources is trading at a lower price-to-earnings ratio than Gatos Silver, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Profitability
This table compares NovaGold Resources and Gatos Silver’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NovaGold Resources | N/A | -146.22% | -32.95% |
| Gatos Silver | N/A | -5.99% | -5.76% |
Analyst Recommendations
This is a breakdown of current recommendations and price targets for NovaGold Resources and Gatos Silver, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NovaGold Resources | 0 | 0 | 0 | 0 | N/A |
| Gatos Silver | 0 | 2 | 0 | 0 | 2.00 |
Gatos Silver has a consensus price target of $4.38, suggesting a potential downside of 39.40%. Given Gatos Silver’s higher probable upside, analysts plainly believe Gatos Silver is more favorable than NovaGold Resources.
Institutional and Insider Ownership
53.9% of NovaGold Resources shares are owned by institutional investors. Comparatively, 49.1% of Gatos Silver shares are owned by institutional investors. 3.3% of NovaGold Resources shares are owned by company insiders. Comparatively, 5.8% of Gatos Silver shares are owned 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.
Summary
Gatos Silver beats NovaGold Resources on 7 of the 9 factors compared between the two stocks.
About NovaGold Resources
NovaGold Resources, Inc. is a mineral exploration company, which engages in the development of the Donlin Gold project in Alaska. The company was founded by Gregory Shawn Johnson, John W. Chisholm, Macisaac G. Angus, Rick van Nieuwenhuyse, and Gerald James McConnell on December 5, 1984 and is headquartered in Salt Lake City, UT.
About Gatos Silver
Gatos Silver, Inc. engages in the exploration, development, and production of precious metals. It primarily explores for silver ores. The company also explores for zinc, lead, copper, and gold ores. Its flagship asset is the Cerro Los Gatos mine located at the Los Gatos District in Chihuahua state, Mexico. The company was formerly known as Sunshine Silver Mining & Refining Corporation and changed its name to Gatos Silver, Inc. in October 2020. Gatos Silver, Inc. was incorporated in 2009 and is based in Greenwood Village, Colorado.
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