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

Volatility & Risk

Royal Gold has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, DRDGOLD Limited has a beta of -1.96, meaning that its stock price is 296% less volatile than the S&P 500.

Institutional & Insider Ownership

70.4% of Royal Gold shares are held by institutional investors. Comparatively, 20.0% of DRDGOLD Limited shares are held by institutional investors. 1.4% of Royal Gold shares are held by insiders. Comparatively, 1.0% of DRDGOLD Limited shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Royal Gold and DRDGOLD Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Gold 0 6 6 0 2.50
DRDGOLD Limited 0 1 0 0 2.00

Royal Gold currently has a consensus target price of $92.35, suggesting a potential downside of 0.14%. Given Royal Gold’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Royal Gold is more favorable than DRDGOLD Limited.

Dividends

Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.0%. DRDGOLD Limited pays an annual dividend of $0.07 per share and has a dividend yield of 2.1%. Royal Gold pays out 61.5% of its earnings in the form of a dividend. Royal Gold has raised its dividend for 4 consecutive years and DRDGOLD Limited has raised its dividend for 12 consecutive years. DRDGOLD Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Royal Gold 23.03% 4.19% 3.09%
DRDGOLD Limited N/A N/A N/A

Earnings and Valuation

This table compares Royal Gold and DRDGOLD Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Royal Gold $439.05 million 13.76 $305.58 million $1.56 59.28
DRDGOLD Limited $185.35 million 0.77 $19.40 million N/A N/A

Royal Gold has higher revenue and earnings than DRDGOLD Limited.

Summary

Royal Gold beats DRDGOLD Limited on 12 of the 15 factors compared between the two stocks.

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.

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).

Receive News & Stock Ratings for Royal Gold Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Royal Gold Inc. and related stocks with our FREE daily email newsletter.