Critical Review: Lucara Diamond (LUCRF) versus Its Competitors

Lucara Diamond (OTCMKTS:LUCRF) is one of 1,989 public companies in the “Metals & Mining” industry, but how does it contrast to its peers? We will compare Lucara Diamond to similar businesses based on the strength of its dividends, risk, valuation, institutional ownership, earnings, profitability and analyst recommendations.

Institutional and Insider Ownership

32.9% of Lucara Diamond shares are held by institutional investors. Comparatively, 15.9% of shares of all “Metals & Mining” companies are held by institutional investors. 17.6% of shares of all “Metals & Mining” companies are held by company 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.

Analyst Ratings

This is a breakdown of current ratings and price targets for Lucara Diamond and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lucara Diamond	0	1	0	0	2.00
Lucara Diamond Competitors	6298	22382	31970	1752	2.47

As a group, “Metals & Mining” companies have a potential upside of 29.55%. Given Lucara Diamond’s peers stronger consensus rating and higher possible upside, analysts clearly believe Lucara Diamond has less favorable growth aspects than its peers.

Profitability

This table compares Lucara Diamond and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lucara Diamond	N/A	N/A	N/A
Lucara Diamond Competitors	-1,155,490,457,955,101,400.00%	-14.49%	-2.09%

Earnings and Valuation

This table compares Lucara Diamond and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Lucara Diamond	N/A	N/A	0.52
Lucara Diamond Competitors	$4.60 billion	$266.77 million	-21.84

Lucara Diamond’s peers have higher revenue and earnings than Lucara Diamond. Lucara Diamond is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Lucara Diamond pays an annual dividend of $0.02 per share and has a dividend yield of 16.0%. Lucara Diamond pays out 8.3% of its earnings in the form of a dividend. As a group, “Metals & Mining” companies pay a dividend yield of 9.2% and pay out 10.6% of their earnings in the form of a dividend. Lucara Diamond is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Summary

Lucara Diamond beats its peers on 7 of the 13 factors compared.

Lucara Diamond Company Profile

Lucara Diamond Corp., a diamond mining company, engages in the development and operation of diamond properties in Africa. The company holds 100% interests in the Karowe mine located in Botswana. It also operates Clara Platform, a digital sales platform for rough diamonds. The company was formerly known as Bannockburn Resources Limited and changed its name to Lucara Diamond Corp. in August 2007. Lucara Diamond Corp. was incorporated in 1981 and is based in Vancouver, Canada.