Analyzing Richmont Mines (RIC) and Goldcorp (GG)

Richmont Mines (NYSE: RIC) and Goldcorp (NYSE:GG) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.

Volatility and Risk

Richmont Mines has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500. Comparatively, Goldcorp has a beta of -0.07, indicating that its share price is 107% less volatile than the S&P 500.

Dividends

Goldcorp pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Richmont Mines does not pay a dividend. Goldcorp pays out 13.1% of its earnings in the form of a dividend. Goldcorp has increased its dividend for 4 consecutive years.

Profitability

This table compares Richmont Mines and Goldcorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Richmont Mines 9.63% 10.07% 8.14%
Goldcorp 14.91% 3.27% 2.06%

Insider & Institutional Ownership

58.8% of Richmont Mines shares are owned by institutional investors. Comparatively, 54.8% of Goldcorp shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Richmont Mines and Goldcorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Richmont Mines 0 1 1 0 2.50
Goldcorp 0 6 9 0 2.60

Goldcorp has a consensus price target of $16.83, indicating a potential upside of 26.60%. Given Goldcorp’s stronger consensus rating and higher probable upside, analysts clearly believe Goldcorp is more favorable than Richmont Mines.

Earnings & Valuation

This table compares Richmont Mines and Goldcorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Richmont Mines $127.39 million 4.28 $9.41 million $0.22 38.86
Goldcorp $3.51 billion 3.28 $162.00 million $0.61 21.79

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

Summary

Goldcorp beats Richmont Mines on 9 of the 16 factors compared between the two stocks.

About Richmont Mines

Richmont Mines Inc. is a mining company. The Company is engaged in mining, exploration and development of mining properties, principally gold. The Company operates gold mines at various sites in Quebec and Ontario. The Company’s segments include Quebec and Ontario. The Company is engaged in producing gold from the Island Gold Mine in Ontario and the Beaufor Mine in Quebec. The Island Gold mine is located 83 kilometers northeast of Wawa, Ontario. It is part of the Island Gold Project, which is divided into nine parts (properties) comprising 219 patented, leased and staked claims covering 7,772 hectares, mainly within the townships of Finan and Jacobson. The Island Gold Project is located in the Michipicoten Greenstone Belt. The Beaufor Mine is located 25 kilometers northeast of Val-d’Or, Quebec. The Camflo mill has rated capacity of 1,200 short tons per day. It is located at Malartic, Quebec. The 7.58 square kilometers Wasamac property is located in the west of Rouyn-Noranda, Quebec.

About Goldcorp

Goldcorp Inc. is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company’s segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). The Company’s principal product is gold dore with the refined gold bullion sold primarily in the London spot market.

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