Goldcorp (NYSE: GG) and Randgold Resources Limited (NASDAQ:GOLD) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitabiliy, earnings, dividends, valuation and analyst recommendations.

Dividends

Goldcorp pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Randgold Resources Limited pays an annual dividend of $1.96 per share and has a dividend yield of 2.2%. Goldcorp pays out 26.7% of its earnings in the form of a dividend. Randgold Resources Limited pays out 70.8% 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. Randgold Resources Limited has increased its dividend for 4 consecutive years. Randgold Resources Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Goldcorp and Randgold Resources Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Goldcorp $3.45 billion 3.24 $1.19 billion $0.30 43.50
Randgold Resources Limited $1.26 billion 6.62 $612.41 million $2.77 32.04

Goldcorp has higher revenue and earnings than Randgold Resources Limited. Randgold Resources Limited is trading at a lower price-to-earnings ratio than Goldcorp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Goldcorp and Randgold Resources Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Goldcorp 0 9 7 0 2.44
Randgold Resources Limited 1 6 10 0 2.53

Goldcorp presently has a consensus price target of $17.21, indicating a potential upside of 31.86%. Randgold Resources Limited has a consensus price target of $102.33, indicating a potential upside of 15.31%. Given Goldcorp’s higher probable upside, research analysts plainly believe Goldcorp is more favorable than Randgold Resources Limited.

Profitability

This table compares Goldcorp and Randgold Resources Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Goldcorp 7.31% 2.72% 1.68%
Randgold Resources Limited 21.04% 7.10% 6.60%

Institutional & Insider Ownership

56.9% of Goldcorp shares are owned by institutional investors. Comparatively, 36.5% of Randgold Resources Limited shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Goldcorp has a beta of 0.04, suggesting that its share price is 96% less volatile than the S&P 500. Comparatively, Randgold Resources Limited has a beta of 0.14, suggesting that its share price is 86% less volatile than the S&P 500.

Summary

Randgold Resources Limited beats Goldcorp on 11 of the 16 factors compared between the two stocks.

About Goldcorp

Goldcorp Inc. is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company’s segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). The Company’s principal product is gold dore with the refined gold bullion sold primarily in the London spot market.

About Randgold Resources Limited

Randgold Resources Limited is engaged in gold mining, exploration and related activities. The Company’s activities are focused on West and Central Africa. The Company operates through the gold mining segment. The Company operates various mines, such as Morila, Loulo, Gounkoto, Tongon and Kibali. The Company is exploring in African countries, such as Mali, Senegal, Cote d’Ivoire and the Democratic Republic of Congo (DRC). The Company also holds an interest in the Massawa project. The Company holds Morila Limited, which holds interests in the Morila mine in Mali. As of December 31, 2016, Morila mine has produced 122,370 ounces (oz) of gold. The Company holds a controlling interest in the Loulo mine, located in Mali, through Societe des Mines de Loulo SA (Loulo). The Loulo mine is mining from over two underground mines. As of December 31, 2016, Loulo mine has produced 350,604 oz of gold. It has a controlling interest in the Gounkoto mine through Societe des Mines de Gounkoto SA.

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