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

Risk & Volatility

Kinross Gold Corporation has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Kinross Gold Corporation 1.54% 3.63% 1.95%
Royal Gold 23.03% 4.19% 3.09%

Dividends

Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. Kinross Gold Corporation does not pay a dividend. Royal Gold pays out 61.5% of its earnings in the form of a dividend. Kinross Gold Corporation has increased its dividend for 12 consecutive years.

Insider and Institutional Ownership

59.6% of Kinross Gold Corporation shares are held by institutional investors. Comparatively, 70.4% of Royal Gold shares are held by institutional investors. 1.0% of Kinross Gold Corporation shares are held by company insiders. Comparatively, 1.4% of Royal Gold shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Kinross Gold Corporation and Royal Gold’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kinross Gold Corporation $3.48 billion 1.52 $1.04 billion $0.05 84.82
Royal Gold $439.05 million 12.86 $305.58 million $1.56 55.38

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

Analyst Recommendations

This is a breakdown of current recommendations for Kinross Gold Corporation and Royal Gold, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kinross Gold Corporation 0 6 5 1 2.58
Royal Gold 0 6 6 0 2.50

Kinross Gold Corporation currently has a consensus price target of $5.17, suggesting a potential upside of 21.89%. Royal Gold has a consensus price target of $93.15, suggesting a potential upside of 7.81%. Given Kinross Gold Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Kinross Gold Corporation is more favorable than Royal Gold.

Summary

Royal Gold beats Kinross Gold Corporation on 10 of the 18 factors compared between the two stocks.

Kinross Gold Corporation Company Profile

Kinross Gold Corporation is a gold mining company. The Company is engaged in gold mining and related activities, including exploration and acquisition of gold-bearing properties, the extraction and processing of gold-containing ore, and reclamation of gold mining properties. The Company’s segments include Fort Knox, Round Mountain, Bald Mountain, Kettle River-Buckhorn, Kupol, Paracatu, Maricunga, Tasiast and Chirano. Fort Knox is an open-pit gold mine located in Fairbanks, Alaska. Round Mountain open-pit mine is located in Nye County, Nevada. Bald Mountain open-pit mine is located in Nevada. Kettle River-Buckhorn mine is located in northern Washington State. The Kupol segment includes the Kupol and Dvoinoye mines. Paracatu is a gold mine located in the State of Minas Gerais, Brazil. Maricunga open pit mine is located in Copiapo, Chile. Tasiast mine is located in north-western Mauritania. Chirano is located in southwestern Ghana.

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.

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