Analyzing Gold Resource (NYSE:GORO) & Buenaventura Mining (NYSE:BVN)

Buenaventura Mining (NYSE:BVN) and Gold Resource (NYSE:GORO) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Buenaventura Mining and Gold Resource, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Buenaventura Mining	0	2	2	0	2.50
Gold Resource	0	1	1	0	2.50

Buenaventura Mining currently has a consensus price target of $37.25, indicating a potential upside of 33.60%. Gold Resource has a consensus price target of $1.75, indicating a potential downside of 46.97%. Given Buenaventura Mining’s higher probable upside, analysts plainly believe Buenaventura Mining is more favorable than Gold Resource.

Institutional & Insider Ownership

18.4% of Gold Resource shares are owned by institutional investors. 19.3% of Buenaventura Mining shares are owned by insiders. Comparatively, 1.3% of Gold Resource shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Buenaventura Mining has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500. Comparatively, Gold Resource has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Earnings and Valuation

This table compares Buenaventura Mining and Gold Resource”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Buenaventura Mining	$1.73 billion	4.08	$782.15 million	$4.42	6.31
Gold Resource	$55.34 million	9.65	-$16.02 million	$0.05	66.00

Buenaventura Mining has higher revenue and earnings than Gold Resource. Buenaventura Mining is trading at a lower price-to-earnings ratio than Gold Resource, indicating that it is currently the more affordable of the two stocks.

Dividends

Buenaventura Mining pays an annual dividend of $1.09 per share and has a dividend yield of 3.9%. Gold Resource pays an annual dividend of $0.04 per share and has a dividend yield of 1.2%. Buenaventura Mining pays out 24.7% of its earnings in the form of a dividend. Gold Resource pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Buenaventura Mining is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Buenaventura Mining and Gold Resource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Buenaventura Mining	50.88%	26.53%	18.88%
Gold Resource	-61.31%	-35.25%	-16.15%

Summary

Buenaventura Mining beats Gold Resource on 12 of the 15 factors compared between the two stocks.

About Buenaventura Mining

Compañía de Minas Buenaventura S.A.A. engages in the exploration, development, construction, and operation of mineral processing business. The company explores for gold, silver, lead, zinc, and copper metals. It operates operating mining units, including Tambomayo located in the Caylloma province, Orcopampa Unit located in the province of Castilla, Uchucchacua located in province of Oyón, Julcani located in province of Angaraes, Peru, as well as San Gabrie located in the province of General Sánchez Cerro, in the Moquegua region. The company owns interests in Colquijirca, La Zanja, Cerro Verde, El Brocal, Coimolache, Yumpaq, San Gregorio mines, and Trapiche mining unit. In addition, it produces monohydrate manganese sulphate; and operates hydroelectric power plants. Compañía de Minas Buenaventura S.A.A. was incorporated in 1953 and is based in Lima, Peru.

About Gold Resource

Gold Resource Corporation engages in the exploration, development, and production of gold and silver projects in Mexico and the United States. The company also explores for copper, lead, and zinc deposits. Its principal assets are the 100% owned Don David gold mine and Back Forty project covering approximately 1,304 hectares located in Menominee county, Michigan. The company was incorporated in 1998 and is headquartered in Denver, Colorado.