DRDGOLD Limited (DRD) & Barrick Gold Corporation (NYSE:ABX) Critical Comparison

Barrick Gold Corporation (NYSE: ABX) and DRDGOLD Limited (NYSE:DRD) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Barrick Gold Corporation and DRDGOLD Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barrick Gold Corporation 0 8 6 0 2.43
DRDGOLD Limited 0 1 0 0 2.00

Barrick Gold Corporation currently has a consensus target price of $20.72, indicating a potential upside of 24.51%. Given Barrick Gold Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Barrick Gold Corporation is more favorable than DRDGOLD Limited.

Dividends

Barrick Gold Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. DRDGOLD Limited pays an annual dividend of $0.07 per share and has a dividend yield of 2.2%. Barrick Gold Corporation pays out 5.9% of its earnings in the form of a dividend. DRDGOLD Limited has raised its dividend for 4 consecutive years. DRDGOLD Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Barrick Gold Corporation has a beta of -0.23, meaning that its share price is 123% less volatile than the S&P 500. Comparatively, DRDGOLD Limited has a beta of -1.96, meaning that its share price is 296% less volatile than the S&P 500.

Insider & Institutional Ownership

58.7% of Barrick Gold Corporation shares are held by institutional investors. Comparatively, 26.6% of DRDGOLD Limited shares are held by institutional investors. 1.0% of DRDGOLD Limited shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Barrick Gold Corporation and DRDGOLD Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Barrick Gold Corporation $8.77 billion 2.21 $4.42 billion $2.02 8.24
DRDGOLD Limited $187.84 million 0.73 $19.66 million N/A N/A

Barrick Gold Corporation has higher revenue and earnings than DRDGOLD Limited.

Profitability

This table compares Barrick Gold Corporation and DRDGOLD Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barrick Gold Corporation 26.95% 8.91% 3.71%
DRDGOLD Limited N/A N/A N/A

Summary

Barrick Gold Corporation beats DRDGOLD Limited on 11 of the 15 factors compared between the two stocks.

About Barrick Gold Corporation

Barrick Gold Corporation (Barrick) is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company’s segments include Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero, Turquoise Ridge, Acacia Mining plc (Acacia), Pascua-Lama and Other Mines. Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines. The Company, through its subsidiary, Acacia, owns gold mines and exploration properties in Africa. It also holds interest in gold mines, including Porgera and Kalgoorlie, and copper mines, such as Zaldivar and Lumwana. The Pascua-Lama project is located on the border between Chile and Argentina. The Company has nine producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia and the Dominican Republic.

About DRDGOLD Limited

DRDGOLD Limited is a gold mining company. The Company is engaged in gold production by tailings retreatment. The Company is focused on the recovery of lower-risk, higher-margin ounces primarily from its metallurgical plant located approximately 50 kilometers east of Johannesburg in Brakpan. The Company owns approximately 100% of its holding company, Ergo Mining Operations Proprietary Limited (EMO). Ergo Mining Proprietary Limited (Ergo) is owned by EMO. Ergo has a vast footprint adjacent to Johannesburg on the central and eastern Witwatersrand of South Africa. Its assets cover an area of approximately 62 kilometers from east to west and over 25 kilometers from north to south. The Ergo operation has over two metallurgical plants in operation, including Knights plant and The Ergo plant. The Knights plant in Germiston is treating the Cason dump and depositing waste on the Brakpan tailings facility (BTF). The Ergo plant has a total treatment capacity of 300,000 tons per month (tpm).

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