Goldcorp (NYSE: GG) and Franco-Nevada Corporation (NYSE:FNV) are both large-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitabiliy and valuation.

Profitability

This table compares Goldcorp and Franco-Nevada Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Goldcorp 13.22% 3.43% 2.15%
Franco-Nevada Corporation 21.26% 4.39% 4.31%

Valuation & Earnings

This table compares Goldcorp and Franco-Nevada Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Goldcorp $3.52 billion 3.20 $1.33 billion $0.55 23.69
Franco-Nevada Corporation $664.10 million 21.13 $514.00 million $0.77 100.86

Goldcorp has higher revenue and earnings than Franco-Nevada Corporation. Goldcorp is trading at a lower price-to-earnings ratio than Franco-Nevada Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

56.8% of Goldcorp shares are held by institutional investors. Comparatively, 63.5% of Franco-Nevada Corporation shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Goldcorp pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Franco-Nevada Corporation pays an annual dividend of $0.92 per share and has a dividend yield of 1.2%. Goldcorp pays out 14.5% of its earnings in the form of a dividend. Franco-Nevada Corporation pays out 119.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Goldcorp has raised its dividend for 4 consecutive years and Franco-Nevada Corporation has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Goldcorp and Franco-Nevada Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Goldcorp 0 10 6 0 2.38
Franco-Nevada Corporation 0 7 7 0 2.50

Goldcorp currently has a consensus target price of $16.73, indicating a potential upside of 28.38%. Franco-Nevada Corporation has a consensus target price of $79.85, indicating a potential upside of 2.82%. Given Goldcorp’s higher probable upside, research analysts plainly believe Goldcorp is more favorable than Franco-Nevada Corporation.

Risk and Volatility

Goldcorp has a beta of 0.02, indicating that its share price is 98% less volatile than the S&P 500. Comparatively, Franco-Nevada Corporation has a beta of -0.03, indicating that its share price is 103% less volatile than the S&P 500.

Summary

Franco-Nevada Corporation beats Goldcorp on 10 of the 15 factors compared between the two stocks.

Goldcorp Company Profile

Goldcorp Inc. is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company’s segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). The Company’s principal product is gold dore with the refined gold bullion sold primarily in the London spot market.

Franco-Nevada Corporation Company Profile

Franco-Nevada Corporation (Franco-Nevada) is a gold-focused royalty and stream company. The Company has interests in silver, platinum group metals, oil and gas and other resource assets. The Company is engaged in resource sector royalty/stream acquisitions and management activities. It has a portfolio of properties in the United States, Canada, Mexico, Peru, Chile and Africa. Its properties in the United States include Goldstrike, Stillwater, Gold Quarry, Marigold, Fire Creek/Midas, Bald Mountain, South Arturo and Other. Its properties in Canada include Sudbury, Detour Lake, Golden Highway, Musselwhite, Hemlo, Kirkland Lake, Timmins West, Canadian Malartic and Other. Its properties in Latin America include Antapaccay, Antamina, Candelaria, Guadalupe-Palmarejo and Other. Its properties in Rest of World include Mine Waste Solutions (MWS), Sabodala, Subika, Tasiast, Karma, Duketon, Edikan and Other.

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