Critical Comparison: Ero Copper (NYSE:ERO) & Royal Gold (NASDAQ:RGLD)

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

Analyst Ratings

This is a summary of current ratings and price targets for Ero Copper and Royal Gold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ero Copper	0	11	5	2	2.50
Royal Gold	1	3	9	0	2.62

Ero Copper presently has a consensus target price of $32.33, indicating a potential downside of 11.59%. Royal Gold has a consensus target price of $289.64, indicating a potential upside of 24.03%. Given Royal Gold’s stronger consensus rating and higher probable upside, analysts clearly believe Royal Gold is more favorable than Ero Copper.

Earnings & Valuation

This table compares Ero Copper and Royal Gold”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ero Copper	$785.80 million	4.86	$263.72 million	$2.98	12.27
Royal Gold	$1.03 billion	19.20	$467.27 million	$9.16	25.49

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

Insider and Institutional Ownership

71.3% of Ero Copper shares are owned by institutional investors. Comparatively, 83.7% of Royal Gold shares are owned by institutional investors. 0.3% of Royal Gold shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ero Copper	29.79%	30.32%	15.17%
Royal Gold	47.74%	12.06%	9.41%

Volatility & Risk

Ero Copper has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Summary

Royal Gold beats Ero Copper on 11 of the 15 factors compared between the two stocks.

About Ero Copper

Ero Copper Corp. engages in the exploration, development, and production of mining projects in Brazil. The company is involved in the production and sale of copper concentrate from the Caraíba operations located in the Curaçá Valley, northeastern Bahia state, Brazil, as well as gold and silver by-products. It also holds 100% interests in the Tucumã project, a copper development project located within southeastern Pará state; and the Xavantina Operations located in Mato Grosso state. Ero Copper Corp. was incorporated in 2016 and is headquartered in Vancouver, Canada.

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.