Comparing Royal Gold (RGLD) and Klondex Mines (KLDX)

Royal Gold (NASDAQ: RGLD) and Klondex Mines (NASDAQ:KLDX) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Profitability

This table compares Royal Gold and Klondex Mines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Gold 23.03% 4.19% 3.09%
Klondex Mines N/A N/A N/A

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Royal Gold and Klondex Mines, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Gold 0 6 6 0 2.50
Klondex Mines 0 0 3 0 3.00

Royal Gold currently has a consensus price target of $93.15, indicating a potential upside of 6.03%. Klondex Mines has a consensus price target of $5.75, indicating a potential upside of 54.57%. Given Klondex Mines’ stronger consensus rating and higher probable upside, analysts plainly believe Klondex Mines is more favorable than Royal Gold.

Dividends

Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. Klondex Mines does not pay a dividend. Royal Gold pays out 61.5% of its earnings in the form of a dividend. Royal Gold has raised its dividend for 12 consecutive years.

Earnings & Valuation

This table compares Royal Gold and Klondex Mines’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Royal Gold $439.05 million 13.07 $305.58 million $1.56 56.31
Klondex Mines $240.24 million 2.75 $51.03 million N/A N/A

Royal Gold has higher revenue and earnings than Klondex Mines.

Insider and Institutional Ownership

70.4% of Royal Gold shares are held by institutional investors. 1.4% of Royal Gold shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Royal Gold beats Klondex Mines on 11 of the 14 factors compared between the two stocks.

About Royal Gold

Royal Gold, Inc., together with its subsidiaries, is engaged in acquiring and managing precious metal streams, royalties and similar interests. The Company operates through two segments: Acquisition and Management of Stream Interests, and Acquisition and Management of Royalty Interests. Its assets are located in Canada, Chile, Dominican Republic, Mexico, the United States, Africa, Australia and Other. As of June 30, 2016, the Company owned stream interests on four producing properties and three development-stage properties. It has investments in stream interests relating to Pueblo Viejo, Andacollo, Wassa and Prestea, and Rainy River. As of June 30, 2016, the Company owned royalty interests on 34 producing properties, 21 development-stage properties and 131 exploration-stage properties, of which it considered 50 to be evaluation-stage projects.

About Klondex Mines

Klondex Mines Ltd is a Canada-based gold and silver mining company. The Company focuses on exploration, development and production of over two gold and silver projects in north central Nevada, being the Fire Creek mine located in Lander County, Nevada, the Midas mine and ore milling facility located in Nevada. Its segments include Fire Creek, Midas, True North, and Corporate and other. Its over 1,000 tons per day milling facility processes mineralized materials from the Midas Mine and the Fire Creek Mine. The Midas Mine is a gold-silver vein deposit located a mile from the town of Midas, Nevada. It also owns an underground mine project located in Manitoba, Canada, which includes the Rice Lake Mine and Mill complex, and early-stage exploration properties located in the State of Nevada, the United States, and Manitoba and Ontario, Canada. The Company’s milling and processing facilities are located at Midas process ore from both Midas and Fire Creek in the State of Nevada.

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