Critical Review: Eldorado Gold (NYSE:EGO) versus Solgold (OTCMKTS:SLGGF)

Eldorado Gold (NYSE:EGO) and Solgold (OTCMKTS:SLGGF) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Eldorado Gold and Solgold, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eldorado Gold	1	5	3	1	2.40
Solgold	0	0	0	0	0.00

Eldorado Gold presently has a consensus target price of $43.71, suggesting a potential upside of 29.62%. Given Eldorado Gold’s stronger consensus rating and higher probable upside, equities analysts clearly believe Eldorado Gold is more favorable than Solgold.

Earnings and Valuation

This table compares Eldorado Gold and Solgold”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eldorado Gold	$1.82 billion	3.68	$507.26 million	$2.48	13.60
Solgold	N/A	N/A	-$36.25 million	($0.01)	-37.40

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

Insider & Institutional Ownership

69.6% of Eldorado Gold shares are owned by institutional investors. 0.6% of Eldorado Gold shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Eldorado Gold and Solgold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eldorado Gold	27.89%	8.63%	5.57%
Solgold	N/A	-26.92%	-12.63%

Risk & Volatility

Eldorado Gold has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Solgold has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.

Summary

Eldorado Gold beats Solgold on 13 of the 14 factors compared between the two stocks.

About Eldorado Gold

Eldorado Gold Corporation, together with its subsidiaries, engages in the mining, exploration, development, and sale of mineral products primarily in Turkey, Canada, Greece, and Romania. The company primarily produces gold, as well as silver, lead, and zinc. It holds a 100% interest in the Kisladag and Efemçukuru mines located in Turkey; Lamaque complex located in Canada; and Olympias, Stratoni, Skouries, Perama Hill, and Sapes gold mines located in Greece, as well as the 80.5% interest in Certej development projects located in Romania. The company was formerly known as Eldorado Corporation Ltd. and changed its name to Eldorado Gold Corporation in April 1996. Eldorado Gold Corporation was incorporated in 1996 and is headquartered in Vancouver, Canada.

About Solgold

SolGold Plc, a mineral exploration and development company, explores for and develops mineral properties in Ecuador, Australia, Chile, and Solomon Islands. The company primarily explores for copper, gold, silver, and molybdenum deposits. Its flagship project is the Cascabel Project that covers an area of approximately 50 square kilometers located in Imbabura province, Northern Ecuador. The company was formerly known as Solomon Gold plc and changed its name to SolGold plc in May 2012. SolGold Plc was incorporated in 2005 and is headquartered in Brisbane, Australia.