Royal Gold (NASDAQ: RGLD) and AngloGold Ashanti Limited (NYSE:AU) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Valuation and Earnings

This table compares Royal Gold and AngloGold Ashanti Limited’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Royal Gold $439.05 million 13.43 $305.58 million $1.56 57.83
AngloGold Ashanti Limited $4.16 billion 0.96 $1.26 billion N/A N/A

AngloGold Ashanti Limited has higher revenue and earnings than Royal Gold.

Profitability

This table compares Royal Gold and AngloGold Ashanti Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Gold 23.03% 4.19% 3.09%
AngloGold Ashanti Limited N/A N/A N/A

Risk and Volatility

Royal Gold has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, AngloGold Ashanti Limited has a beta of -1.36, meaning that its stock price is 236% less volatile than the S&P 500.

Dividends

Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. AngloGold Ashanti Limited pays an annual dividend of $0.09 per share and has a dividend yield of 0.9%. Royal Gold pays out 61.5% of its earnings in the form of a dividend. AngloGold Ashanti Limited has increased its dividend for 12 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Royal Gold and AngloGold Ashanti Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Gold 0 6 6 0 2.50
AngloGold Ashanti Limited 1 4 2 0 2.14

Royal Gold presently has a consensus price target of $92.35, suggesting a potential upside of 2.37%. AngloGold Ashanti Limited has a consensus price target of $12.43, suggesting a potential upside of 27.23%. Given AngloGold Ashanti Limited’s higher possible upside, analysts clearly believe AngloGold Ashanti Limited is more favorable than Royal Gold.

Institutional & Insider Ownership

70.4% of Royal Gold shares are owned by institutional investors. Comparatively, 32.8% of AngloGold Ashanti Limited shares are owned by institutional investors. 1.4% of Royal Gold shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Royal Gold beats AngloGold Ashanti Limited on 10 of the 15 factors compared between the two stocks.

Royal Gold Company Profile

Royal Gold, Inc., together with its subsidiaries, is engaged in acquiring and managing precious metal streams, royalties and similar interests. The Company operates through two segments: Acquisition and Management of Stream Interests, and Acquisition and Management of Royalty Interests. Its assets are located in Canada, Chile, Dominican Republic, Mexico, the United States, Africa, Australia and Other. As of June 30, 2016, the Company owned stream interests on four producing properties and three development-stage properties. It has investments in stream interests relating to Pueblo Viejo, Andacollo, Wassa and Prestea, and Rainy River. As of June 30, 2016, the Company owned royalty interests on 34 producing properties, 21 development-stage properties and 131 exploration-stage properties, of which it considered 50 to be evaluation-stage projects.

AngloGold Ashanti Limited Company Profile

AngloGold Ashanti Limited (AngloGold Ashanti) is a gold mining company. The Company’s business activities span the spectrum of the mining value chain. Its main product is gold. Its portfolio includes over 17 mines in approximately nine countries. It also produces silver, uranium and sulfuric acid as by-products. The Company operates through four segments: South Africa, Continental Africa, Australasia and Americas. Its South African operations comprise over four mines and surface production facilities, which include the Vaal River operations, including Kopanang and Moab Khotsong; The West Wits operations, including Mponeng and TauTona, and surface operations. It has operations in Continental Africa in locations, including Democratic Republic of the Congo, Ghana, Guinea, Mali and Tanzania. The Australasia segment includes the operations in Australia. It consists of Sunrise Dam and Tropicana. The Americas segment includes the operations in Argentina, Brazil and the United States.

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