Randgold Resources Limited (NASDAQ: GOLD) and Primero Mining Corp (NYSE:PPP) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Randgold Resources Limited 22.75% 7.89% 7.33%
Primero Mining Corp -299.62% -2.89% -1.90%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Randgold Resources Limited and Primero Mining Corp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Randgold Resources Limited 1 7 6 0 2.36
Primero Mining Corp 1 1 1 0 2.00

Randgold Resources Limited presently has a consensus target price of $102.33, suggesting a potential upside of 3.85%. Primero Mining Corp has a consensus target price of $1.00, suggesting a potential upside of 536.54%. Given Primero Mining Corp’s higher probable upside, analysts plainly believe Primero Mining Corp is more favorable than Randgold Resources Limited.

Dividends

Randgold Resources Limited pays an annual dividend of $0.98 per share and has a dividend yield of 1.0%. Primero Mining Corp does not pay a dividend. Randgold Resources Limited pays out 31.3% of its earnings in the form of a dividend.

Insider and Institutional Ownership

35.7% of Randgold Resources Limited shares are held by institutional investors. Comparatively, 42.0% of Primero Mining Corp shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Randgold Resources Limited has a beta of -0.05, indicating that its share price is 105% less volatile than the S&P 500. Comparatively, Primero Mining Corp has a beta of -0.4, indicating that its share price is 140% less volatile than the S&P 500.

Valuation and Earnings

This table compares Randgold Resources Limited and Primero Mining Corp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Randgold Resources Limited N/A N/A N/A $3.13 31.48
Primero Mining Corp N/A N/A N/A ($2.39) -0.07

Primero Mining Corp is trading at a lower price-to-earnings ratio than Randgold Resources Limited, indicating that it is currently the more affordable of the two stocks.

Summary

Randgold Resources Limited beats Primero Mining Corp on 8 of the 11 factors compared between the two stocks.

Randgold Resources Limited Company Profile

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.

Primero Mining Corp Company Profile

Primero Mining Corp. is a precious metals producer with operations in both Mexico and Canada. The Company is focused on building a portfolio of precious metals assets in the Americas through acquiring, exploring, developing and operating mineral resource properties. Its segments include San Dimas, Cerro del Gallo, Black Fox Complex and Corporate. It owns over two producing properties, including the San Dimas gold-silver mine, located in Mexico’s San Dimas district, and the Black Fox mine, located in the Township of Black River-Matheson, Ontario, Canada. It owns properties adjacent to the Black Fox mine, Grey Fox and Pike River, which together with the Black Fox mine and the Black Fox mill, located on the Stock Mill property, comprise the Black Fox Complex. It also owns over two exploration properties, including the Cerro del Gallo gold-silver-copper project, which is located in the state of Guanajuato in central Mexico, and Ventanas, which is located in Durango State, Mexico.

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