Buenaventura Mining (NYSE: BVN) and Royal Gold (NASDAQ:RGLD) are both mid-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.
Valuation & Earnings
This table compares Buenaventura Mining and Royal Gold’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Buenaventura Mining||$1.09 billion||3.53||$290.92 million||($1.44)||-8.67|
|Royal Gold||$439.05 million||12.80||$305.58 million||$1.56||55.29|
Royal Gold has higher revenue, but lower earnings than Buenaventura Mining. Buenaventura Mining is trading at a lower price-to-earnings ratio than Royal Gold, indicating that it is currently the more affordable of the two stocks.
Buenaventura Mining pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. Buenaventura Mining pays out -5.6% of its earnings in the form of a dividend. Royal Gold pays out 61.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Royal Gold has raised its dividend for 12 consecutive years. Royal Gold is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Buenaventura Mining and Royal Gold’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
Buenaventura Mining has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Royal Gold has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.
This is a summary of current ratings for Buenaventura Mining and Royal Gold, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Buenaventura Mining currently has a consensus price target of $15.10, suggesting a potential upside of 20.90%. Royal Gold has a consensus price target of $92.35, suggesting a potential upside of 7.07%. Given Buenaventura Mining’s higher possible upside, equities research analysts plainly believe Buenaventura Mining is more favorable than Royal Gold.
Institutional & Insider Ownership
49.3% of Buenaventura Mining shares are held by institutional investors. Comparatively, 70.9% of Royal Gold shares are held by institutional investors. 19.3% of Buenaventura Mining shares are held by insiders. Comparatively, 1.4% of Royal Gold shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Royal Gold beats Buenaventura Mining on 10 of the 15 factors compared between the two stocks.
Buenaventura Mining Company Profile
Compania de Minas Buenaventura S.A.A. (Buenaventura) is a precious metals company. The Company is engaged in the exploration, mining and processing of gold, silver and other metals in Peru. The Company’s segments include Production and sale of minerals; Exploration and development activities; Construction and engineering services; Energy generation and transmission services; Insurance brokerage; Rental of mining concessions; Holding of investment in shares (mainly in Minera Yanacocha S.R.L. and S.M.R.L. Chaupiloma Dos de Cajamarca), and Industrial activities. The Company operates the Orcopampa, Uchucchacua, Julcani, Mallay and Breapampa mines and has controlling interests in over three other mining companies, which operate the Colquijirca-Marcapunta, Tantahuatay and La Zanja mines. It also owns an electric power transmission company, a hydroelectric plant, a processing plant and an engineering services consulting company and non-controlling interests in various other mining companies.
Royal Gold Company Profile
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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