Contrasting Royal Gold (NASDAQ:RGLD) and Pelangio Exploration (OTCMKTS:PGXPF)

Royal Gold (NASDAQ:RGLD) and Pelangio Exploration (OTCMKTS:PGXPF) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Volatility and Risk

Royal Gold has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Pelangio Exploration has a beta of 0.01, indicating that its stock price is 99% less volatile than the S&P 500.

Institutional and Insider Ownership

83.7% of Royal Gold shares are owned by institutional investors. 0.5% of Royal Gold shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Royal Gold and Pelangio Exploration”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Gold	$719.40 million	32.58	$332.02 million	$7.28	38.15
Pelangio Exploration	N/A	N/A	-$550,000.00	N/A	N/A

Royal Gold has higher revenue and earnings than Pelangio Exploration.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Royal Gold and Pelangio Exploration, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Gold	1	2	8	0	2.64
Pelangio Exploration	0	0	0	0	0.00

Royal Gold presently has a consensus target price of $234.60, indicating a potential downside of 15.52%. Given Royal Gold’s stronger consensus rating and higher probable upside, research analysts plainly believe Royal Gold is more favorable than Pelangio Exploration.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Royal Gold	55.99%	14.14%	12.42%
Pelangio Exploration	N/A	-778.64%	-87.35%

Summary

Royal Gold beats Pelangio Exploration on 11 of the 11 factors compared between the two stocks.

About Royal Gold

Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metal streams, royalties, and related interests. The company engages in acquiring stream and royalty interests or to finance projects that are in production, development, or in the exploration stage in exchange for stream or royalty interests, which primarily consists of gold, silver, copper, nickel, zinc, lead, and other metals. Its stream and royalty interests on properties are located in the United States, Canada, Chile, the Dominican Republic, Australia, Africa, Mexico, Botswana, and internationally. Royal Gold, Inc. was incorporated in 1981 and is headquartered in Denver, Colorado.

About Pelangio Exploration

Pelangio Exploration Inc., a mineral exploration company, engages in acquiring, exploring, and developing mineral properties. It holds interests in various gold properties in Ghana and Canada. The company was incorporated in 2008 and is headquartered in Toronto, Canada.