Financial Analysis: A-Mark Precious Metals (AMRK) versus BHP Billiton PLC (NYSE:BBL)

A-Mark Precious Metals (NASDAQ: AMRK) and BHP Billiton PLC (NYSE:BBL) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares A-Mark Precious Metals and BHP Billiton PLC’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
A-Mark Precious Metals $6.99 billion 0.02 $7.08 million $0.79 19.80
BHP Billiton PLC $38.29 billion 1.00 $5.89 billion N/A N/A

BHP Billiton PLC has higher revenue and earnings than A-Mark Precious Metals.

Dividends

A-Mark Precious Metals pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. BHP Billiton PLC pays an annual dividend of $1.66 per share and has a dividend yield of 4.6%. A-Mark Precious Metals pays out 40.5% of its earnings in the form of a dividend.

Insider and Institutional Ownership

19.9% of A-Mark Precious Metals shares are held by institutional investors. Comparatively, 4.3% of BHP Billiton PLC shares are held by institutional investors. 38.8% of A-Mark Precious Metals shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares A-Mark Precious Metals and BHP Billiton PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
A-Mark Precious Metals 0.08% 7.75% 1.09%
BHP Billiton PLC N/A N/A N/A

Analyst Ratings

This is a summary of recent ratings and recommmendations for A-Mark Precious Metals and BHP Billiton PLC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A-Mark Precious Metals 0 1 1 1 3.00
BHP Billiton PLC 1 1 1 0 2.00

A-Mark Precious Metals presently has a consensus target price of $20.90, suggesting a potential upside of 33.63%. BHP Billiton PLC has a consensus target price of $38.00, suggesting a potential upside of 5.06%. Given A-Mark Precious Metals’ stronger consensus rating and higher probable upside, analysts clearly believe A-Mark Precious Metals is more favorable than BHP Billiton PLC.

Volatility and Risk

A-Mark Precious Metals has a beta of 0.06, meaning that its share price is 94% less volatile than the S&P 500. Comparatively, BHP Billiton PLC has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Summary

A-Mark Precious Metals beats BHP Billiton PLC on 8 of the 14 factors compared between the two stocks.

A-Mark Precious Metals Company Profile

A-Mark Precious Metals, Inc. is a precious metal trading company. The Company is a wholesaler of gold, silver, platinum and palladium bullion and related products, including bars, wafers, grain and coins. It distributes gold and silver coins and bars from sovereign and private mints; provides financing for the purchase of bullion and numismatics; offers storage for bullion, and offers complementary products, such as consignment, customized finance and liquidity programs, such as repurchase (Repo) accounts, and trade quotes in a variety of foreign currencies. It operates through various business units for accounting purposes, including Industrial, Coin and Bar, Trading, Finance, Collateral Finance Corporation, Transcontinental Depository Services and Logistics. It is an authorized distributor of gold and silver coins for sovereign mints and various private mints. The sovereign mints include the United States Mint, the Australian (Perth) Mint and the Austrian Mint, among others.

BHP Billiton PLC Company Profile

BHP Billiton Plc is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. It extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. It manages product distribution through its global logistics chain, including freight and pipeline transportation. It sells its products through direct supply agreements with its customers and on global commodity exchanges.

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