New Found Gold (NYSE:NFGC – Get Free Report) and Gatos Silver (NYSE:GATO – Get Free Report) are both small-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.
Volatility & Risk
New Found Gold has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Gatos Silver has a beta of 1.93, indicating that its share price is 93% more volatile than the S&P 500.
Institutional & Insider Ownership
3.4% of New Found Gold shares are held by institutional investors. Comparatively, 44.8% of Gatos Silver shares are held by institutional investors. 3.8% of Gatos Silver shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| New Found Gold | N/A | -82.80% | -68.88% |
| Gatos Silver | N/A | 10.37% | 9.94% |
Earnings & Valuation
This table compares New Found Gold and Gatos Silver”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| New Found Gold | N/A | N/A | -$59.18 million | ($0.22) | -7.41 |
| Gatos Silver | N/A | N/A | $12.86 million | $0.49 | 28.20 |
New Found Gold is trading at a lower price-to-earnings ratio than Gatos Silver, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for New Found Gold and Gatos Silver, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| New Found Gold | 0 | 0 | 1 | 0 | 3.00 |
| Gatos Silver | 0 | 4 | 0 | 1 | 2.40 |
New Found Gold currently has a consensus target price of $9.00, indicating a potential upside of 452.15%. Gatos Silver has a consensus target price of $12.90, indicating a potential downside of 6.66%. Given New Found Gold’s stronger consensus rating and higher probable upside, analysts clearly believe New Found Gold is more favorable than Gatos Silver.
Summary
Gatos Silver beats New Found Gold on 9 of the 12 factors compared between the two stocks.
About New Found Gold
New Found Gold Corp., a mineral exploration company, engages in the identification, evaluation, acquisition, and exploration of mineral properties in the Provinces of Newfoundland and Labrador, and Ontario. It primarily explores for gold deposit. The company holds 100% interests in the Queensway project that includes 96 mineral licenses and 6,659 claims covering an area of 166,475 hectares of land located near Gander, Newfoundland; and the Kingsway project located in Gander, Newfoundland. The company was formerly known as Palisade Resources Corp. and changed its name to New Found Gold Corp. in June 2017. New Found Gold Corp. was incorporated in 2016 and is headquartered in Vancouver, Canada.
About Gatos Silver
Gatos Silver, Inc. engages in the exploration, development, and production of precious metals. It primarily explores for silver deposits. The company also explores for zinc, lead, copper, and gold ores. Its flagship asset is the Los Gatos District, including the Cerro Los Gatos mine in Chihuahua, Mexico. The company was formerly known as Sunshine Silver Mining & Refining Corporation and changed its name to Gatos Silver, Inc. in October 2020. Gatos Silver, Inc. was incorporated in 2009 and is headquartered in Vancouver, Canada.
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