Critical Analysis: Platinum Group Metals (NYSE:PLG) versus Harmony Gold Mining (NYSE:HMY)

Harmony Gold Mining (NYSE:HMY) and Platinum Group Metals (NYSE:PLG) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Institutional and Insider Ownership

31.8% of Harmony Gold Mining shares are owned by institutional investors. Comparatively, 16.3% of Platinum Group Metals shares are owned by institutional investors. 16.0% of Harmony Gold Mining shares are owned by insiders. Comparatively, 0.0% of Platinum Group Metals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Harmony Gold Mining has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500. Comparatively, Platinum Group Metals has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Harmony Gold Mining and Platinum Group Metals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harmony Gold Mining	1	2	0	0	1.67
Platinum Group Metals	0	0	0	0	0.00

Harmony Gold Mining currently has a consensus price target of $8.40, suggesting a potential downside of 8.10%. Given Harmony Gold Mining’s stronger consensus rating and higher possible upside, equities analysts clearly believe Harmony Gold Mining is more favorable than Platinum Group Metals.

Profitability

This table compares Harmony Gold Mining and Platinum Group Metals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harmony Gold Mining	N/A	N/A	N/A
Platinum Group Metals	N/A	-9.48%	-9.11%

Valuation and Earnings

This table compares Harmony Gold Mining and Platinum Group Metals”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harmony Gold Mining	$61.38 billion	0.09	$459.40 million	N/A	N/A
Platinum Group Metals	N/A	N/A	-$4.61 million	($0.06)	-23.75

Harmony Gold Mining has higher revenue and earnings than Platinum Group Metals.

Summary

Harmony Gold Mining beats Platinum Group Metals on 8 of the 9 factors compared between the two stocks.

About Harmony Gold Mining

Harmony Gold Mining Company Limited engages in the exploration, extraction, and processing of gold. The company explores for uranium, silver, copper, and molybdenum deposits. It has eight underground operations in the Witwatersrand Basin; an open-pit mine on the Kraaipan Greenstone Belt; and various surface source operations in South Africa. In addition, the company owns interests in the Hidden Valley, an open-pit gold and silver mine; and the Wafi-Golpu project located in Morobe Province in Papua New Guinea. Further, it holds interest in Rosby and Eva Copper Project located in Queensland, Australia. Harmony Gold Mining Company Limited was incorporated in 1950 and is headquartered in Randfontein, South Africa.

About Platinum Group Metals

Platinum Group Metals Ltd. engages in the exploration and development of platinum and palladium properties. It explores for palladium, platinum, gold, copper, nickel, and rhodium deposits. The company holds 50.02% interest in the Waterberg project located on the Northern Limb of the Bushveld Igneous Complex, South Africa. It also develops next-generation battery technology using platinum and palladium. Platinum Group Metals Ltd. was founded in 2000 and is headquartered in Vancouver, Canada.