Critical Comparison: AngloGold Ashanti (NYSE:AU) & Norsk Hydro ASA (OTCMKTS:NHYDY)

AngloGold Ashanti (NYSE:AU) and Norsk Hydro ASA (OTCMKTS:NHYDY) are both large-cap materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares AngloGold Ashanti and Norsk Hydro ASA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AngloGold Ashanti	32.19%	38.77%	25.72%
Norsk Hydro ASA	4.90%	11.46%	6.05%

Volatility and Risk

AngloGold Ashanti has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Norsk Hydro ASA has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Valuation & Earnings

This table compares AngloGold Ashanti and Norsk Hydro ASA”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AngloGold Ashanti	$9.89 billion	4.63	$2.64 billion	$7.46	12.16
Norsk Hydro ASA	$20.05 billion	0.78	$647.52 million	$0.52	15.15

AngloGold Ashanti has higher earnings, but lower revenue than Norsk Hydro ASA. AngloGold Ashanti is trading at a lower price-to-earnings ratio than Norsk Hydro ASA, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for AngloGold Ashanti and Norsk Hydro ASA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AngloGold Ashanti	0	2	6	2	3.00
Norsk Hydro ASA	1	7	2	1	2.27

AngloGold Ashanti presently has a consensus target price of $120.14, indicating a potential upside of 32.45%. Given AngloGold Ashanti’s stronger consensus rating and higher probable upside, equities analysts plainly believe AngloGold Ashanti is more favorable than Norsk Hydro ASA.

Institutional and Insider Ownership

36.1% of AngloGold Ashanti shares are held by institutional investors. Comparatively, 0.0% of Norsk Hydro ASA shares are held by institutional investors. 0.0% of Norsk Hydro ASA shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

AngloGold Ashanti pays an annual dividend of $0.50 per share and has a dividend yield of 0.6%. Norsk Hydro ASA pays an annual dividend of $0.23 per share and has a dividend yield of 2.9%. AngloGold Ashanti pays out 6.7% of its earnings in the form of a dividend. Norsk Hydro ASA pays out 44.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

AngloGold Ashanti beats Norsk Hydro ASA on 12 of the 17 factors compared between the two stocks.

About AngloGold Ashanti

AngloGold Ashanti plc operates as a gold mining company in Africa, Australia, and the Americas. The company primarily explores for gold, as well as produces silver and sulphuric acid as by-products. Its flagship property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania. AngloGold Ashanti plc was incorporated in 1944 and is headquartered in Greenwood Village, Colorado.

About Norsk Hydro ASA

Norsk Hydro ASA engages in the power production, bauxite extraction, alumina refining, aluminium smelting, and recycling activities; and provision of extruded solutions worldwide. It operates through Hydro Bauxite & Alumina, Hydro Aluminium Metal, Hydro Metal Markets, Hydro Extrusions, and Hydro Energy segments. The Hydro Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, primarily the sale of alumina. The Hydro Aluminium Metal segment is involved in the primary aluminum production casting activities. This segment principally offers extrusion ingots, foundry alloys, and sheet and standard ingots. The Metal Markets segment sells products from the company’s primary metal plants; operates recyclers; and trades in physical and financial metals. The Hydro Extrusions segment offers extrusion profiles, building systems, and precision tubing products for construction, automotive and heating, and ventilation and air conditioning sectors, as well as operates recycling facilities. The Hydro Energy segment engages in the trading and wholesale business in Brazil; energy sourcing operations; and operation of power stations in Norway, as well as renewable energy production, such as wind and solar, battery materials, and green hydrogen. Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.