Gold Resource (NASDAQ: GORO) and Freeport-McMoran (NYSE:FCX) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, profitability, institutional ownership, dividends, valuation and risk.

Insider & Institutional Ownership

68.0% of Freeport-McMoran shares are owned by institutional investors. 1.3% of Freeport-McMoran shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Gold Resource and Freeport-McMoran’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gold Resource 4.04% 3.08% 2.71%
Freeport-McMoran 5.97% 10.45% 2.60%

Analyst Ratings

This is a breakdown of recent ratings for Gold Resource and Freeport-McMoran, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gold Resource 0 0 0 0 N/A
Freeport-McMoran 2 10 4 0 2.13

Freeport-McMoran has a consensus price target of $15.69, suggesting a potential upside of 5.96%. Given Freeport-McMoran’s higher possible upside, analysts plainly believe Freeport-McMoran is more favorable than Gold Resource.

Earnings and Valuation

This table compares Gold Resource and Freeport-McMoran’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gold Resource $85.35 million 2.46 $20.77 million N/A N/A
Freeport-McMoran $15.31 billion 1.40 $5.20 billion $0.71 20.86

Freeport-McMoran has higher revenue and earnings than Gold Resource.

Summary

Freeport-McMoran beats Gold Resource on 8 of the 11 factors compared between the two stocks.

About Gold Resource

Gold Resource Corporation is a mining company. The Company is a producer of metal concentrates that contain gold, silver, copper, lead and zinc, and dore containing gold and silver at the Aguila Project within its Oaxaca Mining Unit located in the southern state of Oaxaca, Mexico. The Company has two units in North America, the Oaxaca Mining Unit and the Nevada Mining Unit. The Company’s mineral properties are classified into two categories, such as Operating Properties and Exploration Properties. As of December 31, 2016, the Company had interest in nine properties, where over six of its properties, including one Operating Property and five Exploration Properties, are within its Oaxaca Mining Unit, which is located in the southern state of Oaxaca, Mexico. As of December 31, 2016, the Company also had three Exploration Properties within its Nevada Mining Unit located in south central Nevada’s Walker Lane Mineral Belt in the United States.

About Freeport-McMoran

Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.

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