Analyzing Ferroglobe (NASDAQ:GSM) and Sibanye Gold (NYSE:SBSW)

Ferroglobe (NASDAQ:GSM) and Sibanye Gold (NYSE:SBSW) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ferroglobe	-12.78%	-8.65%	-4.32%
Sibanye Gold	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ferroglobe and Sibanye Gold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferroglobe	1	1	1	0	2.00
Sibanye Gold	1	1	2	1	2.60

Ferroglobe presently has a consensus target price of $6.00, indicating a potential upside of 41.84%. Sibanye Gold has a consensus target price of $19.93, indicating a potential upside of 50.84%. Given Sibanye Gold’s stronger consensus rating and higher possible upside, analysts clearly believe Sibanye Gold is more favorable than Ferroglobe.

Institutional and Insider Ownership

89.6% of Ferroglobe shares are held by institutional investors. Comparatively, 34.9% of Sibanye Gold shares are held by institutional investors. 13.1% of Ferroglobe shares are held by insiders. Comparatively, 0.1% of Sibanye Gold shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Ferroglobe and Sibanye Gold”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferroglobe	$1.34 billion	0.59	-$170.70 million	($0.92)	-4.60
Sibanye Gold	$7.25 billion	1.29	-$288.00 million	N/A	N/A

Ferroglobe has higher earnings, but lower revenue than Sibanye Gold.

Dividends

Ferroglobe pays an annual dividend of $0.06 per share and has a dividend yield of 1.4%. Sibanye Gold pays an annual dividend of $0.25 per share and has a dividend yield of 1.9%. Ferroglobe pays out -6.5% of its earnings in the form of a dividend. Ferroglobe has increased its dividend for 1 consecutive years.

Volatility & Risk

Ferroglobe has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Sibanye Gold has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Summary

Sibanye Gold beats Ferroglobe on 10 of the 16 factors compared between the two stocks.

About Ferroglobe

Ferroglobe PLC produces and sells silicon metal, and silicon and manganese-based ferroalloys in the United States, Europe, and internationally. It provides silicone chemicals that are used in a range of applications, including personal care items, construction-related products, health care products, and electronics; and silicon metal for primary and secondary aluminum producers. The company also offers silicomanganese, which is used as deoxidizing agent in the steel manufacturing process; and ferromanganese that is used as a deoxidizing, desulphurizing, and degassing agent in the removal of nitrogen and other harmful elements from steel. In addition, it offers ferrosilicon products that are used to produce stainless steel, carbon steel, and various other steel alloys, as well as to manufacture electrodes and aluminum; calcium silicon, which is used in the deoxidation and desulfurization of liquid steel, and production of coatings for cast iron pipes, as well as in the welding process of powder metal and in pyrotechnics; and nodularizers and inoculants, which are used in the production of iron. Further, the company provides silica fume, a by-product of the electrometallurgical process of silicon metal and ferrosilicon. Additionally, it operates quartz mines in South Africa, Spain, the United States, and Canada; and low-ash metallurgical coal mines in the United States; and a charcoal production facility in South Africa, as well as holds interests in hydroelectric power plant in France. The company serves silicone chemical producers; aluminum and steel manufacturers; auto companies and their suppliers; ductile iron foundries; manufacturers of photovoltaic solar cells and computer chips; and concrete producers. Ferroglobe PLC was formerly known as VeloNewco Limited and changed its name to Ferroglobe PLC in December 2015. The company was incorporated in 2015 and is headquartered in London, the United Kingdom.

About Sibanye Gold

Sibanye Stillwater Limited, together with its subsidiaries, operates as a precious metals mining company in South Africa, the United States, Europe, and Australia. The company produces gold; platinum group metals (PGMs), including palladium, platinum, rhodium, iridium, and ruthenium; chrome; nickel; and silver, cobalt, and copper. It owns the East Boulder and Stillwater mines located in Montana, the United States; and Columbus metallurgical complex, which smelts the material mined to produce PGM-rich filter cake, as well as conducts PGM recycling activities. The company also involved in the Kroondal, Rustenburg, Marikana, and Platinum Mile operations situated in South Africa; Mimosa located on the southern portion in Zimbabwe; the Driefontein, Kloof, Rand Refinery, and Cooke surface operations located on the West Rand of the Witwatersrand Basin; and the Beatrix situated in the southern Free State. In addition, it owns an interest in surface tailings retreatment facilities; the Marathon PGM project in Ontario, Canada; the Altar and Rio Grande copper gold projects in the Andes in north-west Argentina; the Hoedspruit; and the Burnstone and southern Free State gold projects in South Africa. Sibanye Stillwater Limited was founded in 2013 and is headquartered in Weltevreden Park, South Africa.