Yamana (YRI) instead of Kinross (K)

These are two large cap gold producers. They have similarities and differences. The title gives away the conclusion to a simple review of these two stocks: Yamana appears to offer more potential than Kinross (as of September 9, 2011). Here is the comparison.


Kinross has low long-term debt, at only 3% debt to equity, which puts it among the strongest balance sheets of the TSX 60. Earnings are positive and produce a P/E of 18.6, which is reasonable, but falls within the bottom 1/3 of the TSX 60. The price momentum of these shares is positive, coming in 8th of the TSX 60. The price has risen 18% over the last three months.


Yamana also has low long-term debt, at 6% debt to equity; this is not as strong as Kinross, but is still 9th best among the TSX 60. Earnings are positive and the P/E is currently 20.4, a little higher than Kinross. In both cases, the low debt offsets the relatively high price. The high price is also a result of the positive price momentum. Momentum for Yamana is 5th of the components of the TSX 60, having risen 50% over the past three months.

Although Yamana is marginally more expensive (P/E) than Kinross, it also has far better price momentum. It is clearly the current favourite, and with money flowing into Yamana, an investor would be wise to join in and ride the wave while it lasts.