Barrick Gold Corporation (NYSE: ABX) and Royal Gold (NASDAQ:RGLD) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitabiliy, dividends, risk, analyst recommendations, earnings and institutional ownership.

Institutional and Insider Ownership

57.8% of Barrick Gold Corporation shares are held by institutional investors. Comparatively, 70.6% of Royal Gold shares are held by institutional investors. 1.4% of Royal Gold shares are held 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.

Valuation & Earnings

This table compares Barrick Gold Corporation and Royal Gold’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Barrick Gold Corporation $8.62 billion 2.19 $4.22 billion $1.21 13.38
Royal Gold $424.25 million 12.93 $295.02 million $1.57 53.48

Barrick Gold Corporation has higher revenue and earnings than Royal Gold. Barrick Gold Corporation is trading at a lower price-to-earnings ratio than Royal Gold, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Barrick Gold Corporation and Royal Gold, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barrick Gold Corporation 0 9 8 0 2.47
Royal Gold 0 5 7 0 2.58

Barrick Gold Corporation currently has a consensus target price of $22.46, indicating a potential upside of 38.73%. Royal Gold has a consensus target price of $89.95, indicating a potential upside of 7.12%. Given Barrick Gold Corporation’s higher probable upside, analysts plainly believe Barrick Gold Corporation is more favorable than Royal Gold.

Volatility and Risk

Barrick Gold Corporation has a beta of -0.25, meaning that its stock price is 125% less volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Profitability

This table compares Barrick Gold Corporation and Royal Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barrick Gold Corporation 16.44% 8.34% 3.32%
Royal Gold 23.93% 4.22% 3.11%

Dividends

Barrick Gold Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. Barrick Gold Corporation pays out 9.9% of its earnings in the form of a dividend. Royal Gold pays out 61.1% 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. Barrick Gold Corporation has increased its dividend for 12 consecutive years.

Summary

Royal Gold beats Barrick Gold Corporation on 9 of the 17 factors compared between the two stocks.

Barrick Gold Corporation Company Profile

Barrick Gold Corporation (Barrick) is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company’s segments include Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero, Turquoise Ridge, Acacia Mining plc (Acacia), Pascua-Lama and Other Mines. Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines. The Company, through its subsidiary, Acacia, owns gold mines and exploration properties in Africa. It also holds interest in gold mines, including Porgera and Kalgoorlie, and copper mines, such as Zaldivar and Lumwana. The Pascua-Lama project is located on the border between Chile and Argentina. The Company has nine producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia and the Dominican Republic.

Royal Gold Company Profile

Royal Gold, Inc., together with its subsidiaries, is engaged in acquiring and managing precious metal streams, royalties and similar interests. The Company operates through two segments: Acquisition and Management of Stream Interests, and Acquisition and Management of Royalty Interests. Its assets are located in Canada, Chile, Dominican Republic, Mexico, the United States, Africa, Australia and Other. As of June 30, 2016, the Company owned stream interests on four producing properties and three development-stage properties. It has investments in stream interests relating to Pueblo Viejo, Andacollo, Wassa and Prestea, and Rainy River. As of June 30, 2016, the Company owned royalty interests on 34 producing properties, 21 development-stage properties and 131 exploration-stage properties, of which it considered 50 to be evaluation-stage projects.

Receive News & Ratings for Barrick Gold Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Barrick Gold Corporation and related companies with MarketBeat.com's FREE daily email newsletter.