NovaGold Resources (NYSE:NG) versus NextSource Materials (OTCMKTS:NSRCF) Financial Analysis

NovaGold Resources (NYSE:NGGet Rating) and NextSource Materials (OTCMKTS:NSRCFGet Rating) are both small-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares NovaGold Resources and NextSource Materials’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NovaGold Resources N/A N/A -$40.54 million ($0.13) -44.92
NextSource Materials N/A N/A -$41.96 million ($0.57) -3.20

NovaGold Resources is trading at a lower price-to-earnings ratio than NextSource Materials, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

52.5% of NovaGold Resources shares are owned by institutional investors. Comparatively, 0.4% of NextSource Materials shares are owned by institutional investors. 3.3% of NovaGold Resources shares are owned by company insiders. Comparatively, 4.6% of NextSource Materials shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares NovaGold Resources and NextSource Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NovaGold Resources N/A -51.33% -21.16%
NextSource Materials N/A N/A -60.41%

Analyst Ratings

This is a summary of recent recommendations and price targets for NovaGold Resources and NextSource Materials, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NovaGold Resources 0 0 0 0 N/A
NextSource Materials 0 0 1 0 3.00

NextSource Materials has a consensus target price of $6.00, suggesting a potential upside of 228.77%. Given NextSource Materials’ higher possible upside, analysts clearly believe NextSource Materials is more favorable than NovaGold Resources.

Volatility & Risk

NovaGold Resources has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, NextSource Materials has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.

Summary

NextSource Materials beats NovaGold Resources on 5 of the 9 factors compared between the two stocks.

About NovaGold Resources (Get Rating)

NovaGold Resources Inc. explores for and develops gold mineral properties in the United States. Its principal asset is the Donlin Gold project consisting of 493 mining claims covering an area of approximately 29,008 hectares located in the Kuskokwim region of southwestern Alaska. The company was formerly known as NovaCan Mining Resources (1985) Limited and changed its name to NovaGold Resources Inc. in March 1987. NovaGold Resources Inc. was incorporated in 1984 and is based in Vancouver, Canada.

About NextSource Materials (Get Rating)

NextSource Materials Inc. acquires, explores for, and develops mineral properties in Madagascar and Canada. The company primarily explores for graphite and vanadium deposits. Its principal mineral property is the Molo graphite mine that includes 2,119 permits covering an area of 827.7 square kilometers located in Southern Madagascar Region, Madagascar. The company was formerly known as Energizer Resources Inc. and changed its name to NextSource Materials Inc. in April 2017. NextSource Materials Inc. was founded in 2004 and is headquartered in Toronto, Canada.

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