Analyzing Verify Smart (OTCMKTS:VSMR) and New Gold (NYSE:NGD)

Verify Smart (OTCMKTS:VSMR) and New Gold (NYSE:NGD) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Profitability

This table compares Verify Smart and New Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verify Smart	N/A	N/A	N/A
New Gold	2.33%	9.38%	3.87%

Valuation and Earnings

This table compares Verify Smart and New Gold”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verify Smart	$220,000.00	71.49	N/A	N/A	N/A
New Gold	$786.50 million	2.67	-$64.50 million	$0.02	133.00

Verify Smart has higher earnings, but lower revenue than New Gold.

Insider and Institutional Ownership

42.8% of New Gold shares are owned by institutional investors. 0.2% of New Gold shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Verify Smart and New Gold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verify Smart	0	0	0	0	0.00
New Gold	0	2	3	2	3.00

New Gold has a consensus price target of $3.08, indicating a potential upside of 15.79%. Given New Gold’s stronger consensus rating and higher possible upside, analysts clearly believe New Gold is more favorable than Verify Smart.

Risk and Volatility

Verify Smart has a beta of 3.29, suggesting that its stock price is 229% more volatile than the S&P 500. Comparatively, New Gold has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Summary

New Gold beats Verify Smart on 10 of the 12 factors compared between the two stocks.

About Verify Smart

Verify Smart Corp. provides wireless software solutions focused on IP fraud protection for secure authenticated transactions and celebrity services for fans interactions worldwide. The company's software solutions are delivered as Software as a Service model over the Internet, and allows its clients to access the company's application software and databases. Its products include VerifyNGo, which provides instant personal verification to combat fraud and identity theft through mobile device; and Prvii, a mobile communications service that enables celebrities to monetize their fan base via messaging channels. Verify Smart Corp. promotes its products and services across various markets, including consumer brands, financial services, sports/entertainment, governments, and educational institutions. The company was formerly known as Treasure Explorations Inc. and changed its name to Verify Smart Corp. in March 2009. Verify Smart Corp. was founded in 2006 and is based in Fernley, Nevada.

About New Gold

New Gold Inc., an intermediate gold mining company, develops and operates of mineral properties in Canada. It primarily explores for gold, silver, and copper deposits. The company’s principal operating properties include 100% interest in the Rainy River mine located in Northwestern Ontario, Canada; and New Afton project situated in South-Central British Columbia. New Gold Inc. is headquartered in Toronto, Canada.