Analyzing Royal Gold (NASDAQ:RGLD) and Gold Reserve (OTCMKTS:GDRZF)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Royal Gold	56.24%	13.30%	12.32%
Gold Reserve	N/A	-36.33%	-28.89%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Gold	$719.40 million	16.78	$332.02 million	$6.82	26.89
Gold Reserve	$3.11 million	44.81	-$15.19 million	($0.21)	-6.67

Royal Gold has higher revenue and earnings than Gold Reserve. Gold Reserve 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

83.7% of Royal Gold shares are held by institutional investors. 0.5% of Royal Gold shares are held by company insiders. Comparatively, 12.8% of Gold Reserve shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Royal Gold and Gold Reserve, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Gold	1	1	7	1	2.80
Gold Reserve	0	0	0	0	0.00

Royal Gold currently has a consensus price target of $220.44, suggesting a potential upside of 20.19%. Given Royal Gold’s stronger consensus rating and higher possible upside, analysts plainly believe Royal Gold is more favorable than Gold Reserve.

Summary

Royal Gold beats Gold Reserve on 12 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 Gold Reserve

Gold Reserve Inc., an exploration stage company, engages in evaluating, acquiring, exploring, and developing mineral properties. It also holds interests in LMS Gold project located in Alaska, the United States. The company was founded in 1956 and is based in Spokane, Washington.