Analyzing Gold Reserve (OTCMKTS:GDRZF) and Kirkland Lake Gold (OTCMKTS:KL)

Gold Reserve (OTCMKTS:GDRZF) and Kirkland Lake Gold (NYSE:KL) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
Gold Reserve N/A -18.72% -18.05%
Kirkland Lake Gold 34.59% 29.11% 21.50%

Valuation & Earnings

This table compares Gold Reserve and Kirkland Lake Gold’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gold Reserve $51.57 million 3.10 $41.86 million N/A N/A
Kirkland Lake Gold $915.91 million 10.47 $273.94 million $1.36 33.54

Kirkland Lake Gold has higher revenue and earnings than Gold Reserve.

Institutional & Insider Ownership

51.5% of Kirkland Lake Gold shares are held by institutional investors. 12.8% of Gold Reserve shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Gold Reserve and Kirkland Lake Gold, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gold Reserve 0 0 0 0 N/A
Kirkland Lake Gold 0 10 2 0 2.17

Kirkland Lake Gold has a consensus price target of $57.75, indicating a potential upside of 26.62%. Given Kirkland Lake Gold’s higher possible upside, analysts plainly believe Kirkland Lake Gold is more favorable than Gold Reserve.

Volatility and Risk

Gold Reserve has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500. Comparatively, Kirkland Lake Gold has a beta of -0.14, indicating that its share price is 114% less volatile than the S&P 500.

Dividends

Gold Reserve pays an annual dividend of $0.76 per share and has a dividend yield of 47.2%. Kirkland Lake Gold pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Kirkland Lake Gold pays out 11.8% of its earnings in the form of a dividend.

Summary

Kirkland Lake Gold beats Gold Reserve on 9 of the 13 factors compared between the two stocks.

Gold Reserve Company Profile

Gold Reserve Inc., an exploration stage company, acquires, explores, and develops mineral properties. The company primarily focuses on the Siembra Minera Project, an open pit gold-copper mining project located in Bolivar, Venezuela. It also has an interest in the LMS Gold Project in Alaska. The company was founded in 1956 and is based in Spokane, Washington.

Kirkland Lake Gold Company Profile

Kirkland Lake Gold Ltd. engages in the acquisition, exploration, development, and operation of gold properties. It owns and operates four underground gold mines, including the Macassa, Holt, and Taylor mines located in northeastern Ontario, Canada; and the Fosterville Mine located in Victoria, Australia, as well as three milling facilities in Canada and Australia. The company was formerly known as Newmarket Gold Inc. and changed its name to Kirkland Lake Gold Ltd. in December 2016. Kirkland Lake Gold Ltd. is headquartered in Toronto, Canada.

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