Critical Comparison: Royal Gold (RGLD) vs. Mesabi Trust (MSB)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Royal Gold -28.39% 4.66% 3.64%
Mesabi Trust 97.13% 231.66% 156.65%

Dividends

Royal Gold pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Mesabi Trust pays an annual dividend of $3.76 per share and has a dividend yield of 13.8%. Royal Gold pays out 56.8% of its earnings in the form of a dividend. Royal Gold has increased its dividend for 13 consecutive years and Mesabi Trust has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Royal Gold and Mesabi Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Gold 0 5 6 0 2.55
Mesabi Trust 0 0 0 0 N/A

Royal Gold presently has a consensus price target of $95.05, suggesting a potential upside of 25.03%. Given Royal Gold’s higher probable upside, equities analysts clearly believe Royal Gold is more favorable than Mesabi Trust.

Insider & Institutional Ownership

75.3% of Royal Gold shares are held by institutional investors. Comparatively, 17.3% of Mesabi Trust shares are held by institutional investors. 1.0% of Royal Gold shares are held by insiders. Comparatively, 0.3% of Mesabi Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Royal Gold has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, Mesabi Trust has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.

Valuation & Earnings

This table compares Royal Gold and Mesabi Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royal Gold $459.04 million 10.85 -$113.13 million $1.76 43.19
Mesabi Trust $34.56 million 10.31 $33.49 million N/A N/A

Mesabi Trust has lower revenue, but higher earnings than Royal Gold.

Royal Gold Company Profile

Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metal streams, royalties, and related interests. It focuses on acquiring stream and royalty interests or to finance projects that are in production or in development stage in exchange for stream or royalty interests, which primarily consists of gold, silver, copper, nickel, zinc, lead, cobalt, and molybdenum. As of August 1, 2018, the company owned interests in 191 properties on 6 continents, including interests on 40 producing mines and 18 development stage projects. Its principal producing stream and royalty interests on properties are located in the United States, Canada, Chile, the Dominican Republic, Ghana, and Mexico. The company also holds stream and royalty interests in mines and projects in other countries, including Argentina, Australia, Bolivia, Brazil, Burkina Faso, Guatemala, Honduras, Macedonia, Nicaragua, Peru, Russia, Spain, and Tunisia. Royal Gold, Inc. was founded in 1981 and is based in Denver, Colorado.

Mesabi Trust Company Profile

Mesabi Trust, a royalty trust, engages in iron ore mining business in the United States. The company was founded in 1919 and is based in New York, New York.

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