Head-To-Head Analysis: Gold Reserve (OTCMKTS:GDRZF) and Sandstorm Gold (NYSE:SAND)

Gold Reserve (OTCMKTS:GDRZF) and Sandstorm Gold (NYSE:SAND) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Profitability

This table compares Gold Reserve and Sandstorm Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gold Reserve	N/A	-38.97%	-31.01%
Sandstorm Gold	15.80%	2.00%	1.56%

Valuation and Earnings

This table compares Gold Reserve and Sandstorm Gold”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gold Reserve	$3.11 million	102.75	-$15.19 million	($0.21)	-15.29
Sandstorm Gold	$176.28 million	16.07	$14.29 million	$0.10	96.60

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

Analyst Recommendations

This is a breakdown of recent ratings for Gold Reserve and Sandstorm Gold, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gold Reserve	0	0	0	0	0.00
Sandstorm Gold	0	2	4	0	2.67

Sandstorm Gold has a consensus target price of $9.25, indicating a potential downside of 4.24%. Given Sandstorm Gold’s stronger consensus rating and higher possible upside, analysts clearly believe Sandstorm Gold is more favorable than Gold Reserve.

Institutional & Insider Ownership

52.0% of Sandstorm Gold shares are held by institutional investors. 12.8% of Gold Reserve shares are held by company insiders. Comparatively, 1.5% of Sandstorm Gold shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Sandstorm Gold beats Gold Reserve on 11 of the 13 factors compared between the two stocks.

About Gold Reserve

Gold Reserve Inc., an exploration stage company, engages in evaluating, acquiring, exploring, and developing mineral properties. It also holds interests in LMS Gold project located in Alaska, the United States. The company was founded in 1956 and is based in Spokane, Washington.

About Sandstorm Gold

Sandstorm Gold Ltd. operates as a gold royalty company. The company focuses on acquiring royalties and gold and other metals purchase agreements from companies that have advanced stage operating mines. It offers upfront payments for companies to acquire a stream and receives the right to purchase a percentage of a mine's production for the life of the mine. The company has a portfolio of 243 streams and royalties. It primarily has operations in Canada, Mexico, the United States, Mongolia, Burkina Faso, Ecuador, South Africa, Ghana, Botswana, Cote D'Ivoire, Argentina, Brazil, Chile, Peru, Egypt, Ethiopia, Guyana, Paraguay, French Guiana, Turkey, Sweden, Fiji, and Australia. The company was formerly known as Sandstorm Resources Ltd. and changed its name to Sandstorm Gold Ltd. in February 2011. Sandstorm Gold Ltd. was incorporated in 2007 and is headquartered in Vancouver, Canada.