Contrasting Royal Gold (RGLD) & SSR Mining (SSRM)

SSR Mining (NASDAQ: SSRM) and Royal Gold (NASDAQ:RGLD) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

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This is a breakdown of current ratings and recommmendations for SSR Mining and Royal Gold, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SSR Mining 0 1 3 0 2.75
Royal Gold 0 7 8 0 2.53

SSR Mining presently has a consensus target price of $12.83, suggesting a potential upside of 26.56%. Royal Gold has a consensus target price of $95.59, suggesting a potential upside of 6.85%. Given SSR Mining’s stronger consensus rating and higher possible upside, equities analysts plainly believe SSR Mining is more favorable than Royal Gold.

Institutional and Insider Ownership

47.2% of SSR Mining shares are owned by institutional investors. Comparatively, 77.6% of Royal Gold shares are owned by institutional investors. 1.1% of Royal Gold shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
SSR Mining 15.76% 4.04% 2.65%
Royal Gold 13.00% 4.31% 3.24%

Valuation & Earnings

This table compares SSR Mining and Royal Gold’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SSR Mining $448.77 million 2.71 $69.31 million $0.34 29.82
Royal Gold $440.81 million 13.28 $101.53 million $1.55 57.72

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

Dividends

Royal Gold pays an annual dividend of $1.00 per share and has a dividend yield of 1.1%. SSR Mining does not pay a dividend. Royal Gold pays out 64.5% of its earnings in the form of a dividend. Royal Gold has raised its dividend for 13 consecutive years.

Risk & Volatility

SSR Mining has a beta of -0.23, suggesting that its stock price is 123% less volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Summary

Royal Gold beats SSR Mining on 12 of the 17 factors compared between the two stocks.

SSR Mining Company Profile

SSR Mining Inc, formerly Silver Standard Resources Inc, is a Canada-based resource company. The Company is engaged in the operation, acquisition, exploration and development of precious metal resource properties located in the Americas. The Company’s segments include Pirquitas mine, Marigold mine, Seabee Gold Operation, and Exploration and evaluation properties. The Company has three producing mines and a portfolio of silver resource dominant projects located throughout the Americas. The Company is focused on silver production from the Pirquitas mine in Argentina and gold production from the Marigold mine in Nevada, the United States. The Company’s other projects include Seabee Gold Operation in Saskatchewan, Canada and Pirquitas mine in Jujuy, Argentina. The Marigold mine produced approximately 205,116 ounces of gold. The Seabee Gold Operation produced approximately 77,640 ounces of gold. The Pirquitas mine produced approximately 10.4 million ounces of silver.

Royal Gold Company Profile

Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metal streams, royalties, and similar interests. It focuses on acquiring stream and royalty interests or to finance projects that are in production or in development stage in exchange for stream or royalty interests. As of June 30, 2017, the company owned stream interests in 4 producing property and 2 development stage properties; and owned royalty interests in 35 producing properties, 18 development stage properties, and 135 exploration stage properties. Its principal producing stream and royalty interests on properties are located in the United States, Canada, Chile, the Dominican Republic, Ghana, and Mexico. The company also holds stream and royalty interests in mines and projects in other countries, including Argentina, Australia, Bolivia, Brazil, Burkina Faso, Guatemala, Honduras, Macedonia, Nicaragua, Peru, Russia, Spain, and Tunisia. Royal Gold, Inc. was founded in 1981 and is based in Denver, Colorado.

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