Eldorado Gold Corporation (NYSE: EGO) and Royal Gold (NASDAQ:RGLD) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
Analyst Recommendations
This is a summary of recent ratings and target prices for Eldorado Gold Corporation and Royal Gold, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eldorado Gold Corporation | 2 | 5 | 2 | 0 | 2.00 |
| Royal Gold | 0 | 6 | 6 | 0 | 2.50 |
Eldorado Gold Corporation currently has a consensus target price of $4.80, suggesting a potential upside of 144.90%. Royal Gold has a consensus target price of $92.35, suggesting a potential upside of 4.07%. Given Eldorado Gold Corporation’s higher possible upside, equities research analysts plainly believe Eldorado Gold Corporation is more favorable than Royal Gold.
Risk and Volatility
Eldorado Gold Corporation has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.
Earnings and Valuation
This table compares Eldorado Gold Corporation and Royal Gold’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Eldorado Gold Corporation | $425.59 million | 3.29 | $143.89 million | $0.01 | 196.20 |
| Royal Gold | $439.05 million | 13.21 | $305.58 million | $1.56 | 56.88 |
Royal Gold has higher revenue and earnings than Eldorado Gold Corporation. Royal Gold is trading at a lower price-to-earnings ratio than Eldorado Gold Corporation, indicating that it is currently the more affordable of the two stocks.
Dividends
Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. Eldorado Gold Corporation does not pay a dividend. Royal Gold pays out 61.5% of its earnings in the form of a dividend. Eldorado Gold Corporation has increased its dividend for 12 consecutive years.
Profitability
This table compares Eldorado Gold Corporation and Royal Gold’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eldorado Gold Corporation | 1.00% | 1.41% | 1.04% |
| Royal Gold | 23.03% | 4.19% | 3.09% |
Insider and Institutional Ownership
55.1% of Eldorado Gold Corporation shares are owned by institutional investors. Comparatively, 70.4% of Royal Gold shares are owned by institutional investors. 1.4% of Royal Gold shares are owned 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.
Summary
Royal Gold beats Eldorado Gold Corporation on 13 of the 17 factors compared between the two stocks.
About Eldorado Gold Corporation
Eldorado Gold Corporation (Eldorado) is a gold exploration, development and mining company. The Company’s geographical segments include Turkey, Brazil, Greece, Romania and Other. The Turkey segment includes the Kisladag and the Efemcukuru mines and exploration activities in Turkey. The Brazil segment includes the Vila Nova mine, Tocantinzinho project and exploration activities in Brazil. The Greece segment includes the Stratoni mine, the Olympias, Skouries, Perama Hill and Sapes projects, and exploration activities in Greece. The Romania segment includes the Certej project and exploration activities in Romania. Other segment includes operations of the Company’s corporate office and exploration activities in other countries. The Company has operations and ongoing exploration and development projects in Turkey, Greece, Brazil and Romania. Its Operating gold mines include Kisladag in Turkey, and Efemcukuru in Turkey.
About Royal Gold
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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