Financial Review: Gold Resource (NYSE:GORO) and Freeport-McMoRan (NYSE:FCX)

Freeport-McMoRan (NYSE:FCX – Get Free Report) and Gold Resource (NYSE:GORO – Get Free Report) are both materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

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 company insiders. Comparatively, 1.3% of Gold Resource shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Freeport-McMoRan and Gold Resource, as provided by MarketBeat.com.

Freeport-McMoRan currently has a consensus target price of $69.75, suggesting a potential upside of 0.48%. Gold Resource has a consensus target price of $1.75, suggesting a potential downside of 50.28%. Given Freeport-McMoRan’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Freeport-McMoRan is more favorable than Gold Resource.

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.

Earnings & Valuation

This table compares Freeport-McMoRan and Gold Resource”s gross revenue, earnings per share and valuation.

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.

Profitability

This table compares Freeport-McMoRan and Gold Resource’s net margins, return on equity and return on assets.

Risk and Volatility

Freeport-McMoRan has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, Gold Resource has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Summary

Freeport-McMoRan beats Gold Resource on 14 of the 17 factors compared between the two stocks.

About Freeport-McMoRan

(Get Free Report)

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

(Get Free Report)

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.