Analyzing Royal Gold (RGLD) & Pershing Gold Corporation (PGLC)

Royal Gold (NASDAQ: RGLD) and Pershing Gold Corporation (NASDAQ:PGLC) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Royal Gold 23.03% 4.19% 3.09%
Pershing Gold Corporation N/A -43.00% -40.70%

Earnings & Valuation

This table compares Royal Gold and Pershing Gold Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Royal Gold $439.05 million 13.82 $305.58 million $1.56 59.52
Pershing Gold Corporation N/A N/A -$14.71 million ($0.59) -5.08

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

Insider & Institutional Ownership

70.4% of Royal Gold shares are owned by institutional investors. Comparatively, 19.7% of Pershing Gold Corporation shares are owned by institutional investors. 1.4% of Royal Gold shares are owned by company insiders. Comparatively, 39.8% of Pershing Gold Corporation shares are owned 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.

Dividends

Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.0%. Pershing Gold Corporation does not pay a dividend. Royal Gold pays out 61.5% of its earnings in the form of a dividend. Pershing Gold Corporation has raised its dividend for 12 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Royal Gold and Pershing Gold Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Gold 0 6 6 0 2.50
Pershing Gold Corporation 0 0 3 0 3.00

Royal Gold currently has a consensus price target of $92.35, suggesting a potential downside of 0.54%. Pershing Gold Corporation has a consensus price target of $7.88, suggesting a potential upside of 162.50%. Given Pershing Gold Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Pershing Gold Corporation is more favorable than Royal Gold.

Volatility & Risk

Royal Gold has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Pershing Gold Corporation has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Summary

Royal Gold beats Pershing Gold Corporation on 9 of the 15 factors compared between the two stocks.

About Royal Gold

Royal Gold, Inc., together with its subsidiaries, is engaged in acquiring and managing precious metal streams, royalties and similar interests. The Company operates through two segments: Acquisition and Management of Stream Interests, and Acquisition and Management of Royalty Interests. Its assets are located in Canada, Chile, Dominican Republic, Mexico, the United States, Africa, Australia and Other. As of June 30, 2016, the Company owned stream interests on four producing properties and three development-stage properties. It has investments in stream interests relating to Pueblo Viejo, Andacollo, Wassa and Prestea, and Rainy River. As of June 30, 2016, the Company owned royalty interests on 34 producing properties, 21 development-stage properties and 131 exploration-stage properties, of which it considered 50 to be evaluation-stage projects.

About Pershing Gold Corporation

Pershing Gold Corporation is a gold and precious metals exploration company. The Company focuses on exploration, development and mining opportunities in Nevada. The Company is focused on exploration at its Relief Canyon properties in Pershing County in northwestern Nevada. The Company operates its business directly and also through its subsidiary, Gold Acquisition Corp. Gold Acquisition Corp. owns and is engaged in conducting exploration on the Relief Canyon Mine property in northwestern Nevada. The Company is engaged in conducting exploration on the Relief Canyon expansion properties. The Relief Canyon Mine includes approximately three open pit mines, heap leach pads consisting of approximately six cells, approximately two solution ponds and a cement block constructed adsorption desorption-recovery (ADR) solution processing circuit. The Pershing Pass property includes approximately 490 lode mining claims. The Company has not generated any revenues.

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