Critical Review: Tredegar (NYSE:TG) and Centerra Gold (NYSE:CGAU)

Centerra Gold (NYSE:CGAU) and Tredegar (NYSE:TG) are both materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.

Profitability

This table compares Centerra Gold and Tredegar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Centerra Gold	23.67%	15.10%	10.45%
Tredegar	4.26%	14.52%	8.07%

Analyst Ratings

This is a summary of recent recommendations and price targets for Centerra Gold and Tredegar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centerra Gold	1	0	4	0	2.60
Tredegar	0	1	0	0	2.00

Centerra Gold presently has a consensus target price of $21.00, suggesting a potential downside of 2.05%. Given Centerra Gold’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Centerra Gold is more favorable than Tredegar.

Dividends

Centerra Gold pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Tredegar pays an annual dividend of $0.52 per share and has a dividend yield of 7.1%. Centerra Gold pays out 9.3% of its earnings in the form of a dividend. Tredegar pays out 54.2% 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.

Volatility & Risk

Centerra Gold has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Tredegar has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Valuation & Earnings

This table compares Centerra Gold and Tredegar”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centerra Gold	$1.38 billion	3.00	$583.99 million	$2.15	9.97
Tredegar	$781.74 million	0.33	$33.48 million	$0.96	7.62

Centerra Gold has higher revenue and earnings than Tredegar. Tredegar is trading at a lower price-to-earnings ratio than Centerra Gold, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

55.4% of Centerra Gold shares are owned by institutional investors. Comparatively, 79.2% of Tredegar shares are owned by institutional investors. 0.2% of Centerra Gold shares are owned by company insiders. Comparatively, 2.5% of Tredegar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Centerra Gold beats Tredegar on 13 of the 16 factors compared between the two stocks.

About Centerra Gold

Centerra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects are the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt gold mine located in Turkey. The company was incorporated in 2002 and is based in Toronto, Canada.

About Tredegar

Tredegar Corporation manufactures and sells aluminum extrusions, polyethylene (PE) films, and plastic and polyester films in the United States and internationally. It operates through three segments: Aluminum Extrusions, PE Films, and Flexible Packaging Films. The Aluminum Extrusions segment produces soft and medium strength alloyed aluminum extrusions, custom fabricated and finished aluminum extrusions for the building and construction, automotive and transportation, consumer durables, machinery and equipment, electrical and renewable energy, and distribution markets; and manufactures mill, anodized, and painted and alloyed aluminum extrusions to fabricators and distributors. The PE Films segment offers single- and multi-layer surface protection films for protecting components of flat panel and flexible displays that are used in televisions, monitors, notebooks, smart phones, tablets, e-readers, and digital signage under the UltraMask, ForceField, ForceField PEARL, Pearl A, and Obsidian brands. This segment provides polyethylene overwrap for bathroom tissue and paper towels, as well as polyethylene overwrap films and films for other markets. The Flexible Packaging Films segment offers polyester-based films for food packaging and industrial applications under the Ecophane and Sealphane brands. Tredegar Corporation was incorporated in 1988 and is headquartered in Richmond, Virginia.