Analyzing Platinum Group Metals (NYSE:PLG) and Gold Resource (NYSE:GORO)

Platinum Group Metals (NYSE:PLGGet Rating) and Gold Resource (NYSE:GOROGet Rating) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Insider and Institutional Ownership

39.2% of Platinum Group Metals shares are held by institutional investors. Comparatively, 28.6% of Gold Resource shares are held by institutional investors. 1.1% of Gold Resource shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Platinum Group Metals and Gold Resource, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Platinum Group Metals 0 0 0 0 N/A
Gold Resource 0 0 0 0 N/A

Profitability

This table compares Platinum Group Metals and Gold Resource’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Platinum Group Metals N/A -42.26% -23.67%
Gold Resource 6.64% 8.82% 5.74%

Valuation and Earnings

This table compares Platinum Group Metals and Gold Resource’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Platinum Group Metals N/A N/A -$13.06 million ($0.16) -8.88
Gold Resource $125.20 million 1.37 $8.03 million $0.12 16.17

Gold Resource has higher revenue and earnings than Platinum Group Metals. Platinum Group Metals is trading at a lower price-to-earnings ratio than Gold Resource, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Platinum Group Metals has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500. Comparatively, Gold Resource has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500.

Summary

Gold Resource beats Platinum Group Metals on 8 of the 10 factors compared between the two stocks.

Platinum Group Metals Company Profile (Get Rating)

Platinum Group Metals Ltd. engages in the exploration and development of platinum and palladium properties. It explores for palladium, platinum, gold, copper, nickel, and rhodium deposits. The company holds 50.02% interest in the Waterberg project located on the Northern Limb of the Western Bushveld complex, South Africa. It also develops next-generation battery technology using platinum and palladium. Platinum Group Metals Ltd. was incorporated in 2000 and is headquartered in Vancouver, Canada.

Gold Resource Company Profile (Get Rating)

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 asset is the 100% owned Back Forty project covering approximately 1,304 hectares located in Menominee county, Michigan. The company was founded in 1998 and is headquartered in Denver, Colorado.

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