Critical Analysis: DRDGOLD Limited (DRD) versus Sandstorm Gold (SAND)
DRDGOLD Limited (NYSE: DRD) and Sandstorm Gold (NASDAQ:SAND) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
DRDGOLD Limited pays an annual dividend of $0.10 per share and has a dividend yield of 2.6%. Sandstorm Gold does not pay a dividend. Sandstorm Gold has increased its dividend for 4 consecutive years.
This is a summary of recent ratings and target prices for DRDGOLD Limited and Sandstorm Gold, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sandstorm Gold has a consensus target price of $6.00, suggesting a potential upside of 30.72%. Given Sandstorm Gold’s stronger consensus rating and higher possible upside, analysts plainly believe Sandstorm Gold is more favorable than DRDGOLD Limited.
Insider and Institutional Ownership
20.0% of DRDGOLD Limited shares are owned by institutional investors. 1.0% of DRDGOLD Limited shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares DRDGOLD Limited and Sandstorm Gold’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares DRDGOLD Limited and Sandstorm Gold’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|DRDGOLD Limited||$180.92 million||0.90||$12.79 million||N/A||N/A|
|Sandstorm Gold||$68.17 million||12.42||$43.87 million||N/A||N/A|
Sandstorm Gold has higher revenue, but lower earnings than DRDGOLD Limited.
Sandstorm Gold beats DRDGOLD Limited on 6 of the 11 factors compared between the two stocks.
DRDGOLD Limited Company Profile
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).
Sandstorm Gold Company Profile
Sandstorm Gold Ltd is a Canada-based company engaged in providing financing to mining companies. The Company focuses on acquiring gold and other metal purchase agreements (Gold Streams or Silver Streams), and royalties from companies that have advanced stage development projects or operating mines. The Company operates in the segments of Bachelor Lake, Black Fox, Chapada Santa Elena, Yamana Silver Stream, Chapada, Diavik Mine, Other Royalties, Other and Corporate. The Company has acquired a portfolio of approximately 140 streams and royalties, of which approximately 20 of the underlying mines are producing. The Company’s projects include Yamana Silver Stream; Cerro Moro, which is located approximately 70 kilometers southwest of the coastal port city of Puerto Deseado; Chapada Mine, which is located 270 kilometers northwest of Brasilia in Goias state, Brazil; Black Fox Mine; Santa Elena Mine; Bachelor Lake Mine; Karma Mine; Ming Mine, Bracemac-McLeod Mine and Aurizona Mine.
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