Ramaco Resources (NASDAQ:METCB) vs. Franco-Nevada (NYSE:FNV) Critical Analysis

Franco-Nevada (NYSE:FNV) and Ramaco Resources (NASDAQ:METCB) are both materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Franco-Nevada and Ramaco Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franco-Nevada	0	5	9	0	2.64
Ramaco Resources	1	0	0	0	1.00

Franco-Nevada currently has a consensus target price of $267.80, indicating a potential upside of 18.97%. Given Franco-Nevada’s stronger consensus rating and higher probable upside, analysts clearly believe Franco-Nevada is more favorable than Ramaco Resources.

Risk and Volatility

Franco-Nevada has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Ramaco Resources has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Valuation and Earnings

This table compares Franco-Nevada and Ramaco Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franco-Nevada	$1.82 billion	23.82	$1.11 billion	$7.65	29.42
Ramaco Resources	$536.62 million	0.49	-$51.45 million	($1.07)	-3.86

Franco-Nevada has higher revenue and earnings than Ramaco Resources. Ramaco Resources is trading at a lower price-to-earnings ratio than Franco-Nevada, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Franco-Nevada and Ramaco Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franco-Nevada	63.79%	18.58%	17.19%
Ramaco Resources	-11.98%	-13.54%	-6.01%

Institutional & Insider Ownership

77.1% of Franco-Nevada shares are held by institutional investors. Comparatively, 9.6% of Ramaco Resources shares are held by institutional investors. 0.7% of Franco-Nevada shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Franco-Nevada beats Ramaco Resources on 13 of the 14 factors compared between the two stocks.

About Franco-Nevada

Franco-Nevada Corporation operates as a gold-focused royalty and streaming company in South America, Central America, Mexico, the United States, Canada, and internationally. It operates through Mining and Energy segments. The company manages its portfolio with a focus on precious metals, such as gold, silver, and platinum group metals; and engages in the sale of crude oil, natural gas, and natural gas liquids through a third-party marketing agent. Franco-Nevada Corporation was founded in 1986 and is headquartered in Toronto, Canada.

About Ramaco Resources

Ramaco Resources, Inc. engages in the development, operation, and sale of metallurgical coal. Its development portfolio includes the Elk Creek project that covers an area of approximately 20,200 acres located in southern West Virginia; the Berwind property covering an area of approximately 62,500 acres situated on the border of West Virginia and Virginia; the Knox Creek property, which covers an area of approximately 64,050 acres is located in Virginia; the Maben property covering an area of approximately 28,000 acres situated in southwestern Pennsylvania southern West Virginia; and the Brook Mine property that covers an area of approximately 16,000 acres located in northeastern Wyoming. The company serves blast furnace steel mills and coke plants in the United States, as well as metallurgical coal consumers internationally. Ramaco Resources, Inc. was founded in 2015 and is headquartered in Lexington, Kentucky.