Critical Contrast: Endeavour Silver (EXK) and Sibanye Gold (SBGL)

Sibanye Gold (NYSE: EXK) and Endeavour Silver (NYSE:EXK) are both small-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Earnings and Valuation

This table compares Sibanye Gold and Endeavour Silver’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sibanye Gold $3.45 billion 0.17 -$334.13 million ($0.04) -59.00
Endeavour Silver $150.50 million 1.91 $9.68 million $0.08 28.00

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

Institutional and Insider Ownership

56.3% of Sibanye Gold shares are held by institutional investors. Comparatively, 19.2% of Endeavour Silver shares are held by institutional investors. 0.1% of Sibanye Gold shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Sibanye Gold and Endeavour Silver, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sibanye Gold 1 2 2 0 2.20
Endeavour Silver 0 2 2 0 2.50

Endeavour Silver has a consensus target price of $5.50, suggesting a potential upside of 145.54%. Given Endeavour Silver’s stronger consensus rating and higher possible upside, analysts clearly believe Endeavour Silver is more favorable than Sibanye Gold.

Risk and Volatility

Sibanye Gold has a beta of -0.12, meaning that its stock price is 112% less volatile than the S&P 500. Comparatively, Endeavour Silver has a beta of -0.35, meaning that its stock price is 135% less volatile than the S&P 500.

Profitability

This table compares Sibanye Gold and Endeavour Silver’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sibanye Gold N/A N/A N/A
Endeavour Silver 0.21% 0.23% 0.19%

Summary

Endeavour Silver beats Sibanye Gold on 9 of the 13 factors compared between the two stocks.

About Sibanye Gold

Sibanye Gold Limited operates as a precious metals mining company in South Africa, Zimbabwe, and the United States. The company operates through PGM; and Gold and Uranium divisions. It owns and operates gold, and platinum group metals (PGM), including platinum, palladium, and rhodium operations and projects, as well as produces by-products, such as iridium, ruthenium, nickel, copper, and chrome. The company owns and operates four underground and surface gold operations in the West Witwatersrand region and the southern Free State province of South Africa; and underground and surface PGM operations in the Bushveld Igneous Complex in South Africa, the Great Dyke in Zimbabwe, and Montana in the United States. It also owns and manages extraction and processing facilities to produce gold doré; recycles PGMs from catalytic materials and other industrial sources; and operates a smelter and base metal refinery. Sibanye Gold Limited was incorporated in 2002 and is based in Westonaria, South Africa.

About Endeavour Silver

Endeavour Silver Corp., a mid-tier precious metals mining company, engages in the mining, evaluation, acquisition, exploration, development, extraction, processing, refining, and reclamation of silver in Mexico and Chile. The company also explores for gold deposits. It owns interests in the Guanaceví mine located in the Guanaceví district, Durango, Mexico; and the Bolañitos and El Cubo silver-gold mines located in the northern parts of the Guanajuato and La Luz silver districts in the state of Guanajuato, Mexico. The company also has interests in various exploration and development projects, including the Terronera property in Jalisco state; the El Compas property in Zacatecas State; and the Parral property located in Chihuahua State, Mexico. In addition, it holds interests in the Guadalupe y Calvo property located in Chihuahua State; and the Lourdes located in the state of Guanajuato, Mexico. The company was formerly known as Endeavour Gold Corp. and changed its name to Endeavour Silver Corp. in September 2004. Endeavour Silver Corp. was founded in 1981 and is headquartered in Vancouver, Canada.

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