Critical Review: US Gold (NASDAQ:USAU) & Royal Gold (NASDAQ:RGLD)

Royal Gold (NASDAQ:RGLD) and US Gold (NASDAQ:USAU) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Royal Gold and US Gold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Gold	1	3	7	0	2.55
US Gold	1	1	2	0	2.25

Royal Gold currently has a consensus target price of $251.50, indicating a potential upside of 5.88%. US Gold has a consensus target price of $26.75, indicating a potential upside of 88.91%. Given US Gold’s higher probable upside, analysts clearly believe US Gold is more favorable than Royal Gold.

Profitability

This table compares Royal Gold and US Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royal Gold	45.26%	11.89%	9.70%
US Gold	N/A	-51.92%	-44.32%

Insider and Institutional Ownership

83.7% of Royal Gold shares are owned by institutional investors. Comparatively, 6.6% of US Gold shares are owned by institutional investors. 0.5% of Royal Gold shares are owned by company insiders. Comparatively, 8.8% of US Gold shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Royal Gold has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, US Gold has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Earnings & Valuation

This table compares Royal Gold and US Gold”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Gold	$1.03 billion	19.55	$467.27 million	$6.81	34.88
US Gold	N/A	N/A	-$20.56 million	($1.45)	-9.77

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

Summary

Royal Gold beats US Gold on 10 of the 13 factors compared between the two stocks.

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.

About US Gold

U.S. Gold Corp. engages in the exploration and development of gold and precious metals in the United States. It also explores for copper and silver deposits. The company holds 100% interests in the CK Gold project, which consists of various mining leases and other mineral rights covering approximately 1,120 acres in Laramie County, Wyoming; the Keystone project that consists of 601 unpatented lode mining claims covering approximately 20 square miles in Eureka County, Nevada; and the Challis Gold project, which consists of 77 unpatented lode mining claims covering approximately 1,710 acres in Lemhi County, Idaho. It also has earn-in agreement to acquire a 50% ownership interest in the Maggie Creek project located in Eureka County, Nevada. The company was formerly known as Dataram Corporation and changed its name to U.S. Gold Corp. in June 2017. U.S. Gold Corp. is based in Elko, Nevada.