Head-To-Head Comparison: Largo (NYSE:LGO) versus Royal Gold (NASDAQ:RGLD)

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

Insider and Institutional Ownership

83.7% of Royal Gold shares are owned by institutional investors. Comparatively, 64.1% of Largo shares are owned by institutional investors. 0.4% of Royal Gold shares are owned by company insiders. Comparatively, 0.3% of Largo shares are owned by company 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.

Earnings & Valuation

This table compares Royal Gold and Largo”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Gold	$1.55 billion	13.66	$467.27 million	$9.16	27.23
Largo	$127.06 million	0.57	-$30.34 million	($1.07)	-0.65

Royal Gold has higher revenue and earnings than Largo. Largo 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 Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Gold	1	4	8	0	2.54
Largo	0	0	2	0	3.00

Royal Gold presently has a consensus target price of $289.64, suggesting a potential upside of 16.13%. Largo has a consensus target price of $2.10, suggesting a potential upside of 201.29%. Given Largo’s stronger consensus rating and higher possible upside, analysts clearly believe Largo is more favorable than Royal Gold.

Volatility and Risk

Royal Gold has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Largo has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Royal Gold	47.74%	12.06%	9.41%
Largo	-35.10%	-22.61%	-14.29%

Summary

Royal Gold beats Largo on 11 of the 14 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 Largo

Largo Inc. engages in the development and sale of vanadium-based energy storage systems in Canada. The company operates through, Sales & Trading, Mine Properties, Corporate, Exploration and Evaluation Properties, and Largo Clean Energy and Largo Physical Vanadium Segments. Its products include VPURE+ vanadium flakes that are used in the production of master alloys and aerospace applications; VPURE vanadium flakes ferrovanadium and vanadium carbon nitride for the steel industry; and VPURE+ vanadium powder for catalyst applications. The company offers renewable energy storage solutions through Largo Clean Energy. Its products are sourced from vanadium deposits at the Maracás Menchen Mine in Brazil. The company was formerly known as Largo Resources Ltd. and changed its name to Largo Inc. in November 2021. The company was incorporated in 1988 and is headquartered in Toronto, Canada.