Head-To-Head Analysis: Mesabi Trust (MSB) & Royal Gold (RGLD)

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

Volatility & Risk

Mesabi Trust has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mesabi Trust $34.56 million 10.00 $33.49 million N/A N/A
Royal Gold $459.04 million 10.62 -$113.13 million $1.76 42.30

Mesabi Trust has higher earnings, but lower revenue than Royal Gold.

Analyst Recommendations

This is a summary of current recommendations and price targets for Mesabi Trust and Royal Gold, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mesabi Trust 0 0 0 0 N/A
Royal Gold 0 6 6 0 2.50

Royal Gold has a consensus price target of $95.15, indicating a potential upside of 27.82%. Given Royal Gold’s higher possible upside, analysts clearly believe Royal Gold is more favorable than Mesabi Trust.

Dividends

Mesabi Trust pays an annual dividend of $3.76 per share and has a dividend yield of 14.3%. Royal Gold pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Royal Gold pays out 56.8% of its earnings in the form of a dividend. Mesabi Trust has raised its dividend for 4 consecutive years and Royal Gold has raised its dividend for 13 consecutive years.

Institutional & Insider Ownership

18.8% of Mesabi Trust shares are held by institutional investors. Comparatively, 75.4% of Royal Gold shares are held by institutional investors. 0.5% of Mesabi Trust shares are held by company insiders. Comparatively, 1.0% of Royal Gold shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Mesabi Trust 97.13% 231.66% 156.65%
Royal Gold -28.39% 4.66% 3.64%

About Mesabi Trust

Mesabi Trust, a royalty trust, engages in iron ore mining business in the United States. The company was founded in 1919 and is based in New York, New York.

About Royal Gold

Royal Gold, Inc. engages in the acquisition and management of metal streams, royalties, and similar interests. It operates through the Acquisition and Management of Stream Interests and Acquisition and Management of Royalty Interests segments. The Acquisition and Management of Stream Interests segment involves in the purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals. The Acquisition and Management of Royalty Interests segment focuses on the non-operating interests in mining projects that provide the revenue or metals produced from the project. The company was founded on January 5, 1981 and is headquartered in Denver, CO.

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