Amerigo Resources (OTCMKTS:ARREF) & New Gold (NYSE:NGD) Head-To-Head Comparison

New Gold (NYSE:NGD) and Amerigo Resources (OTCMKTS:ARREF) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of current ratings and target prices for New Gold and Amerigo Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
New Gold	0	2	3	2	3.00
Amerigo Resources	0	0	0	0	N/A

New Gold presently has a consensus price target of $2.74, suggesting a potential downside of 4.64%. Given New Gold’s higher possible upside, analysts clearly believe New Gold is more favorable than Amerigo Resources.

Profitability

This table compares New Gold and Amerigo Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
New Gold	-2.53%	5.22%	2.03%
Amerigo Resources	7.16%	11.50%	6.08%

Risk and Volatility

New Gold has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Amerigo Resources has a beta of 3.02, meaning that its share price is 202% more volatile than the S&P 500.

Valuation and Earnings

This table compares New Gold and Amerigo Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
New Gold	$810.80 million	2.80	-$64.50 million	($0.10)	-28.75
Amerigo Resources	$157.46 million	1.33	$3.38 million	($0.01)	-126.65

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

Insider & Institutional Ownership

42.8% of New Gold shares are held by institutional investors. 0.2% of New Gold shares are held by insiders. Comparatively, 19.3% of Amerigo Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

About New Gold

New Gold Inc., an intermediate gold mining company, develops and operates of mineral properties in Canada. It primarily explores for gold, silver, and copper deposits. The company’s principal operating properties include 100% interest in the Rainy River mine located in Northwestern Ontario, Canada; and New Afton project situated in South-Central British Columbia. New Gold Inc. is headquartered in Toronto, Canada.

About Amerigo Resources

Amerigo Resources Ltd., through its subsidiary, Minera Valle Central S.A., engages in the production and sale of copper and molybdenum concentrates from Codelco's El Teniente underground mine in Chile. The company was formerly known as Golden Temple Mining Corp. and changed its name to Amerigo Resources Ltd. in March 2002. The company was incorporated in 1984 and is headquartered in Vancouver, Canada.