Critical Contrast: New Gold (NYSE:NGD) and Hudbay Minerals (NYSE:HBM)

Hudbay Minerals (NYSE:HBM) and New Gold (NYSE:NGD) are two mid-cap companies in the basic materials sector. Investors often want to know which company is the better investment choice. To understand this, we will evaluate both businesses by looking at profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings, and risk.

Analyst Ratings

Analyst ratings help investors gauge the market perception of stocks. For Hudbay Minerals and New Gold, a summary from MarketBeat.com shows the following:

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hudbay Minerals	0	0	4	2	3.33
New Gold	0	2	3	2	3.00

Currently, Hudbay Minerals has a target price of $11.17, suggesting it could rise by 23.25%. New Gold has a target price of $3.08, indicating a potential upside of 11.19%. Therefore, analysts seem to favor Hudbay Minerals over New Gold based on these ratings.

Volatility & Risk

In terms of stock volatility, Hudbay Minerals has a beta of 1.78, making it 78% more volatile than the S&P 500. On the other hand, New Gold has a beta of 1.31, suggesting it is 31% more volatile than the S&P 500.

Profitability

Profitability is essential for evaluating a company's financial health. The following table compares key profitability metrics for Hudbay Minerals and New Gold:

	Net Margins	Return on Equity	Return on Assets
Hudbay Minerals	4.03%	6.71%	2.89%
New Gold	2.33%	9.38%	3.87%

While Hudbay Minerals has a higher net margin, New Gold shows a higher return on equity and return on assets.

Earnings and Valuation

Understanding earnings and valuation indicators also provides clarity. The table below summarizes these factors:

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hudbay Minerals	$1.69 billion	2.11	$66.37 million	$0.23	39.39
New Gold	$786.50 million	2.79	-$64.50 million	$0.02	138.50

Hudbay Minerals shows higher revenue and profitability compared to New Gold. Additionally, Hudbay trades at a lower price-to-earnings ratio, which makes it seem like a more affordable option.

Insider and Institutional Ownership

Another factor in understanding stability and confidence in a company is ownership structure. Hudbay Minerals has 57.8% of its shares owned by institutional investors, while New Gold has 42.8%. Insider ownership is also relatively low, with 0.3% in Hudbay and 0.2% in New Gold. High institutional ownership can indicate confidence in a company's long-term growth prospects.

Summary

Overall, Hudbay Minerals outperforms New Gold in 10 out of 14 evaluated factors, showcasing stronger indicators across various categories.

About Hudbay Minerals

Hudbay Minerals Inc. is a diversified mining company focusing on exploring, developing, operating, and optimizing properties across North and South America. The company produces various metals, including copper, gold, silver, and molybdenum. Its key project is the Constancia mine in Peru, which it wholly owns. Founded in 1927, Hudbay Minerals is based in Toronto, Canada.

About New Gold

New Gold Inc. operates as an intermediate gold mining company, engaged in the development and operation of mineral properties in Canada. The company’s primary assets include the Rainy River mine in Ontario and the New Afton project in British Columbia. New Gold is also headquartered in Toronto, Canada.

Mining, Investing, Stocks