Gold Resource (NYSE:GORO – Get Free Report) and Centerra Gold (NYSE:CGAU – Get Free Report) are both small-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
Profitability
This table compares Gold Resource and Centerra Gold’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gold Resource | -61.31% | -35.25% | -16.15% |
| Centerra Gold | 8.31% | 10.34% | 7.70% |
Analyst Ratings
This is a summary of recent ratings and recommmendations for Gold Resource and Centerra Gold, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gold Resource | 0 | 0 | 1 | 0 | 3.00 |
| Centerra Gold | 0 | 2 | 2 | 0 | 2.50 |
Insider and Institutional Ownership
18.4% of Gold Resource shares are owned by institutional investors. Comparatively, 55.4% of Centerra Gold shares are owned by institutional investors. 2.5% of Gold Resource shares are owned by company insiders. Comparatively, 0.2% of Centerra Gold shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Gold Resource has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, Centerra Gold has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.
Dividends
Gold Resource pays an annual dividend of $0.04 per share and has a dividend yield of 17.4%. Centerra Gold pays an annual dividend of $0.20 per share and has a dividend yield of 3.5%. Gold Resource pays out -8.2% of its earnings in the form of a dividend. Centerra Gold pays out 41.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Gold Resource is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Gold Resource and Centerra Gold”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gold Resource | $73.90 million | 0.30 | -$16.02 million | ($0.49) | -0.47 |
| Centerra Gold | $1.25 billion | 0.95 | -$81.28 million | $0.48 | 11.85 |
Gold Resource has higher earnings, but lower revenue than Centerra Gold. Gold Resource is trading at a lower price-to-earnings ratio than Centerra Gold, indicating that it is currently the more affordable of the two stocks.
Summary
Centerra Gold beats Gold Resource on 9 of the 16 factors compared between the two stocks.
About Gold Resource
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 assets are the 100% owned Don David gold mine and Back Forty project covering approximately 1,304 hectares located in Menominee county, Michigan. The company was incorporated in 1998 and is headquartered in Denver, Colorado.
About Centerra Gold
Centerra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects are the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt gold mine located in Turkey. The company was incorporated in 2002 and is based in Toronto, Canada.
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