Royal Gold (NASDAQ: RGLD) and Iamgold Corporation (NYSE:IAG) are both mid-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.
Valuation and Earnings
This table compares Royal Gold and Iamgold Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Royal Gold||$439.05 million||12.80||$305.58 million||$1.56||55.29|
|Iamgold Corporation||$1.07 billion||2.48||$857.40 million||$1.07||5.33|
Iamgold Corporation has higher revenue and earnings than Royal Gold. Iamgold Corporation is trading at a lower price-to-earnings ratio than Royal Gold, indicating that it is currently the more affordable of the two stocks.
Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. Iamgold Corporation does not pay a dividend. Royal Gold pays out 61.5% of its earnings in the form of a dividend. Iamgold Corporation has raised its dividend for 12 consecutive years.
This is a breakdown of current recommendations and price targets for Royal Gold and Iamgold Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Royal Gold currently has a consensus target price of $92.35, suggesting a potential upside of 7.07%. Iamgold Corporation has a consensus target price of $5.85, suggesting a potential upside of 2.63%. Given Royal Gold’s stronger consensus rating and higher probable upside, analysts plainly believe Royal Gold is more favorable than Iamgold Corporation.
Risk & Volatility
Royal Gold has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Iamgold Corporation has a beta of -0.31, meaning that its share price is 131% less volatile than the S&P 500.
Institutional & Insider Ownership
70.9% of Royal Gold shares are owned by institutional investors. Comparatively, 57.3% of Iamgold Corporation shares are owned by institutional investors. 1.4% of Royal Gold shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Royal Gold and Iamgold Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Royal Gold beats Iamgold Corporation on 11 of the 17 factors compared between the two stocks.
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.
Iamgold Corporation Company Profile
IAMGOLD Corporation (IAMGOLD) is engaged primarily in the exploration for, and the development and production of, mineral resource properties throughout the world. Through its holdings, IAMGOLD has interests in various operations, exploration and development properties. IAMGOLD is a mid-tier mining company with approximately four operating gold mines on over three continents. The Company’s gold mine segment is divided into geographic segments, such as Burkina Faso – Essakane mine; Suriname-Rosebel mine; Canada-Doyon division, which includes the Westwood mine and the Doyon mine, and Joint ventures (Mali)-Sadiola mine (41%) and Yatela mine (40%). The Company’s non-gold segments are divided into Exploration and evaluation, and Corporate, which includes royalty interests located in Canada and investments in associates and joint ventures. In Canada, the Company owns the Westwood mine in Quebec and the Cote Gold project, a development project located in Ontario.
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