Analyzing Verify Smart (OTCMKTS:VSMR) and New Gold (NYSE:NGD)

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

Institutional and Insider Ownership

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

Profitability

This table compares New Gold and Verify Smart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
New Gold	2.33%	9.38%	3.87%
Verify Smart	N/A	N/A	N/A

Earnings and Valuation

This table compares New Gold and Verify Smart”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
New Gold	$786.50 million	2.85	-$64.50 million	$0.02	141.50
Verify Smart	$220,000.00	39.32	N/A	N/A	N/A

Verify Smart has lower revenue, but higher earnings than New Gold.

Risk & Volatility

New Gold has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500. Comparatively, Verify Smart has a beta of 3.29, meaning that its share price is 229% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for New Gold and Verify Smart, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
New Gold	0	2	3	2	3.00
Verify Smart	0	0	0	0	0.00

New Gold currently has a consensus price target of $3.08, suggesting a potential upside of 8.83%. Given New Gold’s stronger consensus rating and higher possible upside, research analysts clearly believe New Gold is more favorable than Verify Smart.

Summary

New Gold beats Verify Smart on 10 of the 12 factors compared between the two stocks.

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 Verify Smart

Verify Smart Corp. provides wireless software solutions focused on IP fraud protection for secure authenticated transactions and celebrity services for fans interactions worldwide. The company's software solutions are delivered as Software as a Service model over the Internet, and allows its clients to access the company's application software and databases. Its products include VerifyNGo, which provides instant personal verification to combat fraud and identity theft through mobile device; and Prvii, a mobile communications service that enables celebrities to monetize their fan base via messaging channels. Verify Smart Corp. promotes its products and services across various markets, including consumer brands, financial services, sports/entertainment, governments, and educational institutions. The company was formerly known as Treasure Explorations Inc. and changed its name to Verify Smart Corp. in March 2009. Verify Smart Corp. was founded in 2006 and is based in Fernley, Nevada.