Sandstorm Gold (NYSE:SAND – Get Free Report) and Royal Gold (NASDAQ:RGLD – Get Free Report) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.
Risk & Volatility
Sandstorm Gold has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Sandstorm Gold and Royal Gold, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sandstorm Gold | 1 | 2 | 4 | 0 | 2.43 |
| Royal Gold | 0 | 3 | 5 | 0 | 2.63 |
Dividends
Sandstorm Gold pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. Royal Gold pays an annual dividend of $1.80 per share and has a dividend yield of 0.9%. Sandstorm Gold pays out 50.0% of its earnings in the form of a dividend. Royal Gold pays out 26.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Royal Gold has raised its dividend for 25 consecutive years. Royal Gold is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Sandstorm Gold and Royal Gold’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sandstorm Gold | 17.78% | 2.38% | 1.87% |
| Royal Gold | 56.24% | 13.30% | 12.32% |
Insider & Institutional Ownership
52.0% of Sandstorm Gold shares are owned by institutional investors. Comparatively, 83.7% of Royal Gold shares are owned by institutional investors. 1.5% of Sandstorm Gold shares are owned by insiders. Comparatively, 0.5% of Royal Gold shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Sandstorm Gold and Royal Gold”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sandstorm Gold | $176.28 million | 20.50 | $14.29 million | $0.12 | 102.08 |
| Royal Gold | $719.40 million | 18.00 | $332.02 million | $6.82 | 28.84 |
Royal Gold has higher revenue and earnings than Sandstorm Gold. Royal Gold is trading at a lower price-to-earnings ratio than Sandstorm Gold, indicating that it is currently the more affordable of the two stocks.
Summary
Royal Gold beats Sandstorm Gold on 13 of the 17 factors compared between the two stocks.
About Sandstorm Gold
Sandstorm Gold Ltd. operates as a gold royalty company. The company focuses on acquiring royalties and gold and other metals purchase agreements from companies that have advanced stage operating mines. It offers upfront payments for companies to acquire a stream and receives the right to purchase a percentage of a mine's production for the life of the mine. The company has a portfolio of 243 streams and royalties. It primarily has operations in Canada, Mexico, the United States, Mongolia, Burkina Faso, Ecuador, South Africa, Ghana, Botswana, Cote D'Ivoire, Argentina, Brazil, Chile, Peru, Egypt, Ethiopia, Guyana, Paraguay, French Guiana, Turkey, Sweden, Fiji, and Australia. The company was formerly known as Sandstorm Resources Ltd. and changed its name to Sandstorm Gold Ltd. in February 2011. Sandstorm Gold Ltd. was incorporated in 2007 and is headquartered in Vancouver, Canada.
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.
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