Analyzing Royal Gold (NASDAQ:RGLD) & Gold Fields (NYSE:GFI)

Royal Gold (NASDAQ:RGLD) and Gold Fields (NYSE:GFI) are both large-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

83.7% of Royal Gold shares are owned by institutional investors. Comparatively, 24.8% of Gold Fields shares are owned by institutional investors. 0.4% of Royal Gold shares are owned by insiders. Comparatively, 36.8% of Gold Fields shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Royal Gold and Gold Fields, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Gold	2	2	8	0	2.50
Gold Fields	2	4	5	0	2.27

Royal Gold currently has a consensus price target of $273.64, indicating a potential upside of 14.60%. Gold Fields has a consensus price target of $49.75, indicating a potential upside of 10.87%. Given Royal Gold’s stronger consensus rating and higher possible upside, research analysts plainly believe Royal Gold is more favorable than Gold Fields.

Valuation and Earnings

This table compares Royal Gold and Gold Fields”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Gold	$1.03 billion	19.67	$467.27 million	$8.39	28.46
Gold Fields	$8.75 billion	4.59	$3.57 billion	N/A	N/A

Gold Fields has higher revenue and earnings than Royal Gold.

Profitability

This table compares Royal Gold and Gold Fields’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royal Gold	48.59%	12.63%	9.99%
Gold Fields	N/A	N/A	N/A

Risk & Volatility

Royal Gold has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Gold Fields has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Dividends

Royal Gold pays an annual dividend of $1.90 per share and has a dividend yield of 0.8%. Gold Fields pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Royal Gold pays out 22.6% of its earnings in the form of a dividend. Royal Gold has raised its dividend for 25 consecutive years.

Summary

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

About Royal Gold

Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metal streams, royalties, and related interests. The company engages in acquiring stream and royalty interests or to finance projects that are in production, development, or in the exploration stage in exchange for stream or royalty interests, which primarily consists of gold, silver, copper, nickel, zinc, lead, and other metals. Its stream and royalty interests on properties are located in the United States, Canada, Chile, the Dominican Republic, Australia, Africa, Mexico, Botswana, and internationally. Royal Gold, Inc. was incorporated in 1981 and is headquartered in Denver, Colorado.

About Gold Fields

Gold Fields Limited operates as a gold producer with reserves and resources in Chile, South Africa, Ghana, Canada, Australia, and Peru. It also explores for copper and silver deposits. The company was founded in 1887 and is based in Sandton, South Africa.