Royal Gold (NASDAQ:RGLD) vs. Barrick Mining (NYSE:B) Financial Analysis

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

Institutional and Insider Ownership

90.8% of Barrick Mining shares are owned by institutional investors. Comparatively, 83.7% of Royal Gold shares are owned by institutional investors. 5.2% of Barrick Mining shares are owned by company insiders. Comparatively, 0.5% of Royal Gold shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Barrick Mining has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Barrick Mining	19.99%	8.19%	5.73%
Royal Gold	56.24%	13.30%	12.32%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barrick Mining	$14.60 billion	4.27	$2.14 billion	$2.07	17.87
Royal Gold	$857.71 million	18.29	$332.02 million	$7.28	25.53

Barrick Mining has higher revenue and earnings than Royal Gold. Barrick Mining 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 Ratings

This is a summary of current recommendations and price targets for Barrick Mining and Royal Gold, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barrick Mining	0	4	12	2	2.89
Royal Gold	1	1	7	1	2.80

Barrick Mining presently has a consensus target price of $42.90, suggesting a potential upside of 15.96%. Royal Gold has a consensus target price of $221.22, suggesting a potential upside of 19.05%. Given Royal Gold’s higher probable upside, analysts plainly believe Royal Gold is more favorable than Barrick Mining.

Dividends

Barrick Mining pays an annual dividend of $0.70 per share and has a dividend yield of 1.9%. Royal Gold pays an annual dividend of $1.80 per share and has a dividend yield of 1.0%. Barrick Mining pays out 33.8% of its earnings in the form of a dividend. Royal Gold pays out 24.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Royal Gold has increased its dividend for 25 consecutive years.

Summary

Royal Gold beats Barrick Mining on 10 of the 18 factors compared between the two stocks.

About Barrick Mining

Barrick Gold Corporation is a sector-leading gold and copper producer.  Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX.
 
In January 2019 Barrick merged with Randgold Resources and in July that year it combined its gold mines in Nevada, USA, with those of Newmont Corporation in a joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick. Nevada Gold Mines is the world’s largest gold mining complex.  Barrick owns and operates six Tier One gold mines:  Cortez, Carlin and Turquoise Ridge in Nevada, Loulo-Gounkoto in Mali, Kibali in the Democratic Republic of Congo and Pueblo Viejo in the Dominican Republic.
 
It has gold and copper mines and projects in 13 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia. Barrick’s diversified portfolio spans the world’s most prolific gold districts and is focused on high-margin, long life assets.

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.