POSCO (NYSE:PKX) and Centerra Gold (NYSE:CGAU) Financial Review

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

Earnings & Valuation

This table compares Centerra Gold and POSCO”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centerra Gold	$1.38 billion	3.19	$583.99 million	$3.13	7.23
POSCO	$48.64 billion	0.39	$483.48 million	$2.64	23.85

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

Dividends

Centerra Gold pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. POSCO pays an annual dividend of $1.15 per share and has a dividend yield of 1.8%. Centerra Gold pays out 6.4% of its earnings in the form of a dividend. POSCO pays out 43.6% 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.

Analyst Ratings

This is a breakdown of current ratings and price targets for Centerra Gold and POSCO, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centerra Gold	0	2	5	0	2.71
POSCO	1	0	1	1	2.67

Centerra Gold currently has a consensus target price of $21.00, indicating a potential downside of 7.14%. Given Centerra Gold’s stronger consensus rating and higher probable upside, research analysts plainly believe Centerra Gold is more favorable than POSCO.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Centerra Gold	36.92%	15.35%	10.73%
POSCO	1.79%	1.99%	1.18%

Institutional and Insider Ownership

55.4% of Centerra Gold shares are held by institutional investors. 0.2% of Centerra Gold shares are held by company insiders. Comparatively, 0.0% of POSCO shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Centerra Gold has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, POSCO has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Summary

Centerra Gold beats POSCO on 12 of the 17 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 POSCO

POSCO Holdings Inc., together with its subsidiaries, operates as an integrated steel producer in Korea and internationally. It operates through six segments: Steel, Trading, Construction, Logistics and Others, Green Materials and Energy, and Others. The company engages in the production, import, sale, and export of steel products, such as hot and cold rolled steel, stainless steel, plates, wire rods, and silicon steel sheets, as well as pig iron, billets, blooms, and slabs; trading of steel and raw materials, textiles, agricultural commodities, and other goods; natural resources development and power generation activities; and planning, designing, and construction of industrial plants, civil engineering projects, and commercial and residential buildings. It is also involved in the manufacture and sale of various energy-related and other industrial materials, including anode and cathode materials for rechargeable batteries; investment business; and provision of alternative environmentally-friendly energy solutions, as well as information technology and operational technology, and integrated logistics services. POSCO Holdings Inc. was incorporated in 1968 and is based in Seoul, South Korea.