Financial Analysis: Gold Resource (NYSE:GORO) vs. B2Gold (NYSE:BTG)

B2Gold (NYSE:BTG) and Gold Resource (NYSE:GORO) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Risk and Volatility

B2Gold has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Gold Resource has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Institutional and Insider Ownership

61.4% of B2Gold shares are owned by institutional investors. Comparatively, 18.4% of Gold Resource shares are owned by institutional investors. 1.2% of B2Gold shares are owned by insiders. Comparatively, 2.7% of Gold Resource shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares B2Gold and Gold Resource”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
B2Gold	$1.94 billion	2.16	$10.10 million	($0.03)	-107.00
Gold Resource	$81.18 million	0.41	-$16.02 million	($0.21)	-1.73

B2Gold has higher revenue and earnings than Gold Resource. B2Gold is trading at a lower price-to-earnings ratio than Gold Resource, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for B2Gold and Gold Resource, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
B2Gold	0	5	1	0	2.17
Gold Resource	0	0	1	0	3.00

B2Gold presently has a consensus target price of $4.12, suggesting a potential upside of 28.25%. Gold Resource has a consensus target price of $1.75, suggesting a potential upside of 381.70%. Given Gold Resource’s stronger consensus rating and higher probable upside, analysts clearly believe Gold Resource is more favorable than B2Gold.

Profitability

This table compares B2Gold and Gold Resource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
B2Gold	-7.44%	8.01%	6.25%
Gold Resource	-51.93%	-27.52%	-13.63%

Dividends

B2Gold pays an annual dividend of $0.16 per share and has a dividend yield of 5.0%. Gold Resource pays an annual dividend of $0.04 per share and has a dividend yield of 11.0%. B2Gold pays out -533.3% of its earnings in the form of a dividend. Gold Resource pays out -19.0% 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.

Summary

B2Gold beats Gold Resource on 9 of the 15 factors compared between the two stocks.

About B2Gold

B2Gold Corp. operates as a gold producer company. It operates the Fekola Mine in Mali, the Masbate Mine in the Philippines, and the Otjikoto Mine in Namibia. The company also has an 100% interest in the Gramalote gold project in Colombia; 24% interest in the Calibre Mining Corp.; and approximately 19% interest in BeMetals Corp. In addition, it has a portfolio of other evaluation and exploration assets in Mali and Finland. The company was incorporated in 2006 and is headquartered in Vancouver, Canada.

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.