Head-To-Head Analysis: Royal Gold (RGLD) & SSR Mining (SSRM)

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

Profitability

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

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

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royal Gold $440.81 million 13.28 $101.53 million $1.55 57.72
SSR Mining $448.77 million 2.75 $69.31 million $0.34 30.24

Royal Gold has higher earnings, but lower revenue 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.

Analyst Ratings

This is a summary of recent ratings and target prices for Royal Gold and SSR Mining, as reported by MarketBeat.

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

Royal Gold currently has a consensus price target of $95.59, indicating a potential upside of 6.85%. SSR Mining has a consensus price target of $12.83, indicating a potential upside of 24.84%. Given SSR Mining’s stronger consensus rating and higher possible upside, analysts plainly believe SSR Mining is more favorable than Royal Gold.

Risk and Volatility

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

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 increased its dividend for 13 consecutive years.

Insider and Institutional Ownership

77.6% of Royal Gold shares are held by institutional investors. Comparatively, 47.2% of SSR Mining shares are held by institutional investors. 1.1% of Royal Gold shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

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

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.

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.

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