Head-To-Head Comparison: Gold Resource (NYSE:GORO) and Gold Royalty (NYSE:GROY)

Gold Resource (NYSE:GORO) and Gold Royalty (NYSE:GROY) are both small-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Valuation & Earnings

This table compares Gold Resource and Gold Royalty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gold Resource	$81.18 million	0.38	-$16.02 million	($0.21)	-1.62
Gold Royalty	$6.50 million	35.63	-$26.76 million	($0.17)	-8.06

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

Institutional & Insider Ownership

18.4% of Gold Resource shares are held by institutional investors. Comparatively, 33.8% of Gold Royalty shares are held by institutional investors. 2.7% of Gold Resource shares are held by company insiders. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gold Resource	-51.93%	-27.52%	-13.63%
Gold Royalty	-381.76%	-0.53%	-0.40%

Dividends

Gold Resource pays an annual dividend of $0.04 per share and has a dividend yield of 11.7%. Gold Royalty pays an annual dividend of $0.01 per share and has a dividend yield of 0.7%. Gold Resource pays out -19.0% of its earnings in the form of a dividend. Gold Royalty pays out -5.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Gold Resource is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Gold Resource has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Gold Royalty has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Gold Resource and Gold Royalty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gold Resource	0	0	1	0	3.00
Gold Royalty	0	0	2	0	3.00

Gold Resource currently has a consensus target price of $1.75, indicating a potential upside of 413.05%. Gold Royalty has a consensus target price of $3.67, indicating a potential upside of 167.64%. Given Gold Resource’s higher possible upside, equities analysts clearly believe Gold Resource is more favorable than Gold Royalty.

Summary

Gold Resource beats Gold Royalty on 9 of the 15 factors compared between the two stocks.

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.

About Gold Royalty

Gold Royalty Corp., a precious metals-focused royalty company, provides financing solutions to the metals and mining industry. It focuses on acquiring royalties, streams, and similar interests at varying stages of the mine life cycle to build a portfolio offering near, medium, and longer-term returns for its investors. Gold Royalty Corp. was incorporated in 2020 and is headquartered in Vancouver, Canada.