Critical Comparison: Seabridge Gold (SA) and BHP Billiton (BHP)

Seabridge Gold (NYSE: SA) and BHP Billiton (NYSE:BHP) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Volatility & Risk

Seabridge Gold has a beta of -0.41, suggesting that its stock price is 141% less volatile than the S&P 500. Comparatively, BHP Billiton has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Valuation and Earnings

This table compares Seabridge Gold and BHP Billiton’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Seabridge Gold N/A N/A -$5.50 million ($0.11) -108.18
BHP Billiton $38.29 billion 2.06 $5.89 billion $2.21 22.18

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

Dividends

BHP Billiton pays an annual dividend of $1.72 per share and has a dividend yield of 3.5%. Seabridge Gold does not pay a dividend. BHP Billiton pays out 77.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

28.5% of Seabridge Gold shares are held by institutional investors. Comparatively, 3.3% of BHP Billiton shares are held by institutional investors. 12.8% of Seabridge Gold shares are held by company insiders. Comparatively, 0.0% of BHP Billiton shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Seabridge Gold and BHP Billiton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Seabridge Gold N/A -2.25% -2.07%
BHP Billiton N/A N/A N/A

Analyst Ratings

This is a summary of recent ratings and price targets for Seabridge Gold and BHP Billiton, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Seabridge Gold 0 0 0 0 N/A
BHP Billiton 5 6 3 0 1.86

BHP Billiton has a consensus target price of $38.60, indicating a potential downside of 21.25%. Given BHP Billiton’s higher probable upside, analysts clearly believe BHP Billiton is more favorable than Seabridge Gold.

Summary

BHP Billiton beats Seabridge Gold on 10 of the 13 factors compared between the two stocks.

Seabridge Gold Company Profile

Seabridge Gold Inc. (Seabridge) is a development-stage company. The Company is engaged in the acquisition and exploration of gold properties located in North America. As of December 31, 2016, the Company owned six properties with gold resources. Its material properties are its Kerr-Sulphurets-Mitchell (KSM) Project and its Courageous Lake Project. Its KSM Project is located within the Iskut-Stikine region of British Columbia, approximately 21 kilometers south-southeast of the former Eskay Creek Mine and approximately 65 kilometers north-northwest of Stewart, British Columbia. As of December 31, 2016, the KSM property consisted of three discontinuous claim blocks. These claim blocks are referred to as the KSM claim group; the Seabee/Tina claims, and the KSM placer claim block. As of December 31, 2016, the two claim blocks (KSM and Seabee/Tina) contained two mineral leases and 73 mineral claims, consisting of both cell and legacy claims.

BHP Billiton Company Profile

BHP Billiton Limited 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. The Company extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. The Company manages product distribution through its global logistics chain, including freight and pipeline transportation. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing.

Receive News & Ratings for Seabridge Gold Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Seabridge Gold and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply