Gold Resource (NYSE:GORO – Get Free Report) and Olympic Steel (NASDAQ:ZEUS – Get Free Report) are both small-cap materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.
Insider and Institutional Ownership
18.4% of Gold Resource shares are held by institutional investors. Comparatively, 87.1% of Olympic Steel shares are held by institutional investors. 1.3% of Gold Resource shares are held by company insiders. Comparatively, 13.8% of Olympic Steel shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Gold Resource and Olympic Steel, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gold Resource | 0 | 1 | 1 | 0 | 2.50 |
| Olympic Steel | 0 | 1 | 0 | 0 | 2.00 |
Earnings and Valuation
This table compares Gold Resource and Olympic Steel”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gold Resource | $55.34 million | 10.33 | -$16.02 million | $0.05 | 70.60 |
| Olympic Steel | $1.90 billion | 0.28 | $22.98 million | $1.17 | 40.91 |
Olympic Steel has higher revenue and earnings than Gold Resource. Olympic Steel is trading at a lower price-to-earnings ratio than Gold Resource, indicating that it is currently the more affordable of the two stocks.
Dividends
Gold Resource pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. Olympic Steel pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. Gold Resource pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Olympic Steel pays out 54.7% of its earnings in the form of a dividend. Olympic Steel has raised its dividend for 4 consecutive years. Olympic Steel is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Gold Resource and Olympic Steel’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gold Resource | -61.31% | -35.25% | -16.15% |
| Olympic Steel | 0.73% | 2.11% | 1.14% |
Volatility and Risk
Gold Resource has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Olympic Steel has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500.
Summary
Olympic Steel beats Gold Resource on 13 of the 17 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 Olympic Steel
Olympic Steel, Inc. processes, distributes, and stores metal products primarily in the United States, Canada, and Mexico. It operates in three segments: Carbon Flat Products; Specialty Metals Flat Products; and Tubular and Pipe Products. The company offers stainless steel and aluminum coil and sheet products, angles, rounds, and flat bars; alloy, heat treated, and abrasion resistant coils, sheets and plates; coated metals, including galvanized, galvannealed, electro galvanized, advanced high strength steels, aluminized, and automotive grades of steel; commercial quality, advanced high strength steel, drawing steel, and automotive grades cold rolled steel coil and sheet products; hot rolled carbon comprising hot rolled coil, pickled and oiled sheet and plate steel products, automotive grades, advanced high strength steels, and high strength low alloys; tube, pipe, and bar products, including round, square, and rectangular mechanical and structural tubing; hydraulic and stainless tubing; boiler tubing; carbon, stainless, and aluminum pipes; valves and fittings; and tin mill products, such as electrolytic tinplate, electrolytic chromium coated steel, and black plates. The company also provides cutting-to-length, slitting, shearing, blanking, tempering, stretcher-leveling, plate and laser processing, forming and machining, tube processing, finishing, and fabrication services, as well as value-added services, such as saw cutting, laser cutting, beveling, threading, and grooving services. It serves metal consuming industries, such as manufacturers and fabricators of transportation and material handling lift equipment, construction, mining and farm equipment, agriculture equipment, storage tanks, environmental and energy generation equipment, automobiles, food service, and electrical equipment, as well as general and plate fabricators, and metals service centers through direct sales force. Olympic Steel, Inc. was founded in 1954 and is based in Highland Hills, Ohio.
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