Comparing Buenaventura Mining (NYSE:BVN) and Gold Resource (NYSE:GORO)

Gold Resource (NYSE:GORO) and Buenaventura Mining (NYSE:BVN) are both materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Gold Resource and Buenaventura Mining, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gold Resource	0	1	1	0	2.50
Buenaventura Mining	0	2	2	0	2.50

Gold Resource presently has a consensus price target of $1.75, indicating a potential downside of 46.65%. Buenaventura Mining has a consensus price target of $37.25, indicating a potential upside of 35.27%. Given Buenaventura Mining’s higher probable upside, analysts clearly believe Buenaventura Mining is more favorable than Gold Resource.

Insider and Institutional Ownership

18.4% of Gold Resource shares are held by institutional investors. 1.3% of Gold Resource shares are held by insiders. Comparatively, 19.3% of Buenaventura Mining shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Gold Resource and Buenaventura Mining’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%
Buenaventura Mining	50.88%	26.53%	18.88%

Valuation and Earnings

This table compares Gold Resource and Buenaventura Mining”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gold Resource	$55.34 million	9.60	-$16.02 million	$0.05	65.60
Buenaventura Mining	$1.73 billion	4.03	$782.15 million	$4.42	6.23

Buenaventura Mining has higher revenue and earnings than Gold Resource. Buenaventura Mining 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 1.2%. Buenaventura Mining pays an annual dividend of $1.09 per share and has a dividend yield of 4.0%. 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. Buenaventura Mining pays out 24.7% of its earnings in the form of a dividend. Buenaventura Mining is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Gold Resource has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Buenaventura Mining has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Summary

Buenaventura Mining beats Gold Resource on 12 of the 15 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 Buenaventura Mining

Compañía de Minas Buenaventura S.A.A. engages in the exploration, development, construction, and operation of mineral processing business. The company explores for gold, silver, lead, zinc, and copper metals. It operates operating mining units, including Tambomayo located in the Caylloma province, Orcopampa Unit located in the province of Castilla, Uchucchacua located in province of Oyón, Julcani located in province of Angaraes, Peru, as well as San Gabrie located in the province of General Sánchez Cerro, in the Moquegua region. The company owns interests in Colquijirca, La Zanja, Cerro Verde, El Brocal, Coimolache, Yumpaq, San Gregorio mines, and Trapiche mining unit. In addition, it produces monohydrate manganese sulphate; and operates hydroelectric power plants. Compañía de Minas Buenaventura S.A.A. was incorporated in 1953 and is based in Lima, Peru.