Critical Review: Franco-Nevada (NYSE:FNV) & Pelangio Exploration (OTCMKTS:PGXPF)

Franco-Nevada (NYSE:FNV) and Pelangio Exploration (OTCMKTS:PGXPF) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Earnings and Valuation

This table compares Franco-Nevada and Pelangio Exploration”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franco-Nevada	$1.11 billion	45.90	$552.10 million	$4.77	55.57
Pelangio Exploration	N/A	N/A	-$550,000.00	N/A	N/A

Franco-Nevada has higher revenue and earnings than Pelangio Exploration.

Profitability

This table compares Franco-Nevada and Pelangio Exploration’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franco-Nevada	59.48%	13.94%	13.12%
Pelangio Exploration	N/A	-778.64%	-87.35%

Volatility and Risk

Franco-Nevada has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, Pelangio Exploration has a beta of 0.01, indicating that its stock price is 99% less volatile than the S&P 500.

Institutional and Insider Ownership

77.1% of Franco-Nevada shares are owned by institutional investors. 0.7% of Franco-Nevada shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Franco-Nevada and Pelangio Exploration, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franco-Nevada	0	6	7	1	2.64
Pelangio Exploration	0	0	0	0	0.00

Franco-Nevada currently has a consensus price target of $232.75, suggesting a potential downside of 12.20%. Given Franco-Nevada’s stronger consensus rating and higher probable upside, research analysts clearly believe Franco-Nevada is more favorable than Pelangio Exploration.

Summary

Franco-Nevada beats Pelangio Exploration on 12 of the 12 factors compared between the two stocks.

About Franco-Nevada

Franco-Nevada Corporation operates as a gold-focused royalty and streaming company in South America, Central America, Mexico, the United States, Canada, and internationally. It operates through Mining and Energy segments. The company manages its portfolio with a focus on precious metals, such as gold, silver, and platinum group metals; and engages in the sale of crude oil, natural gas, and natural gas liquids through a third-party marketing agent. Franco-Nevada Corporation was founded in 1986 and is headquartered in Toronto, Canada.

About Pelangio Exploration

Pelangio Exploration Inc., a mineral exploration company, engages in acquiring, exploring, and developing mineral properties. It holds interests in various gold properties in Ghana and Canada. The company was incorporated in 2008 and is headquartered in Toronto, Canada.