Critical Comparison: Sibanye Gold (NYSE:SBSW) and Glencore (OTCMKTS:GLNCY)

Sibanye Gold (NYSE:SBSW) and Glencore (OTCMKTS:GLNCY) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.

Dividends

Sibanye Gold pays an annual dividend of $0.25 per share and has a dividend yield of 2.1%. Glencore pays an annual dividend of $0.27 per share and has a dividend yield of 1.8%.

Profitability

This table compares Sibanye Gold and Glencore’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
Glencore	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings and recommmendations for Sibanye Gold and Glencore, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sibanye Gold	1	2	2	0	2.20
Glencore	0	3	6	2	2.91

Sibanye Gold currently has a consensus price target of $19.93, suggesting a potential upside of 66.81%. Glencore has a consensus price target of $9.30, suggesting a potential downside of 38.65%. Given Sibanye Gold’s higher possible upside, research analysts clearly believe Sibanye Gold is more favorable than Glencore.

Institutional and Insider Ownership

34.9% of Sibanye Gold shares are owned by institutional investors. Comparatively, 0.1% of Glencore shares are owned by institutional investors. 0.1% of Sibanye Gold shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sibanye Gold	$7.25 billion	1.17	-$289.58 million	N/A	N/A
Glencore	$247.54 billion	0.36	$363.00 million	N/A	N/A

Glencore has higher revenue and earnings than Sibanye Gold.

Volatility & Risk

Sibanye Gold has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Glencore has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Summary

Sibanye Gold beats Glencore on 6 of the 11 factors compared between the two stocks.

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.

About Glencore

Glencore plc engages in the production, refinement, processing, storage, transport, and marketing of metals and minerals, and energy products in the Americas, Europe, Asia, Africa, and Oceania. It operates through two segments: Marketing Activities and Industrial Activities. The company engages in production and marketing copper, cobalt, lead, nickel, zinc, chrome ore, ferrochrome, vanadium, aluminum, alumina, and iron ore; and coal, crude oil, refined products, and natural gas, as well as oil exploration/production and refining/distribution. It also operates marketing and distribution of physical commodities sourced from third party producers and company’s production to industrial consumers, including the battery, electronic, construction, automotive, steel, energy, and oil industries. In addition, the company provides financing, logistics, and other services to producers and consumers of commodities. Glencore plc was founded in 1974 and is headquartered in Baar, Switzerland.