Freeport-McMoRan (NYSE:FCX – Get Free Report) and Gold Resource (NYSE:GORO – Get Free Report) are both materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.
Profitability
This table compares Freeport-McMoRan and Gold Resource’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Freeport-McMoRan | 11.39% | 10.63% | 5.69% |
| Gold Resource | -61.31% | -35.25% | -16.15% |
Risk & Volatility
Freeport-McMoRan has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, Gold Resource has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Freeport-McMoRan | 0 | 4 | 20 | 1 | 2.88 |
| Gold Resource | 0 | 1 | 1 | 0 | 2.50 |
Freeport-McMoRan currently has a consensus price target of $69.75, suggesting a potential upside of 0.48%. Gold Resource has a consensus price target of $1.75, suggesting a potential downside of 50.28%. Given Freeport-McMoRan’s stronger consensus rating and higher possible upside, equities analysts plainly believe Freeport-McMoRan is more favorable than Gold Resource.
Insider and Institutional Ownership
80.8% of Freeport-McMoRan shares are held by institutional investors. Comparatively, 18.4% of Gold Resource shares are held by institutional investors. 0.7% of Freeport-McMoRan shares are held by insiders. Comparatively, 1.3% of Gold Resource shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Freeport-McMoRan and Gold Resource”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Freeport-McMoRan | $25.87 billion | 3.85 | $2.20 billion | $2.03 | 34.19 |
| Gold Resource | $55.34 million | 10.30 | -$16.02 million | $0.05 | 70.40 |
Freeport-McMoRan has higher revenue and earnings than Gold Resource. Freeport-McMoRan is trading at a lower price-to-earnings ratio than Gold Resource, indicating that it is currently the more affordable of the two stocks.
Dividends
Freeport-McMoRan pays an annual dividend of $0.30 per share and has a dividend yield of 0.4%. Gold Resource pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. Freeport-McMoRan pays out 14.8% of its earnings in the form of a dividend. Gold Resource pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Summary
Freeport-McMoRan beats Gold Resource on 14 of the 17 factors compared between the two stocks.
About Freeport-McMoRan
Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. It primarily explores for copper, gold, molybdenum, silver, and other metals. The company's assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Chino and Tyrone in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile. The company was formerly known as Freeport-McMoRan Copper & Gold Inc. and changed its name to Freeport-McMoRan Inc. in July 2014. Freeport-McMoRan Inc. was incorporated in 1987 and is headquartered in Phoenix, Arizona.
About Gold Resource
Gold Resource Corporation engages in the exploration, development, and production of gold and silver projects in Mexico and the United States. The company also explores for copper, lead, and zinc deposits. Its principal assets are the 100% owned Don David gold mine and Back Forty project covering approximately 1,304 hectares located in Menominee county, Michigan. The company was incorporated in 1998 and is headquartered in Denver, Colorado.
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