Franco-Nevada (NYSE: FNV) and Richmont Mines (NYSE:RIC) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Profitability

This table compares Franco-Nevada and Richmont Mines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franco-Nevada 22.12% 4.31% 4.23%
Richmont Mines 9.63% 10.07% 8.14%

Earnings & Valuation

This table compares Franco-Nevada and Richmont Mines’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Franco-Nevada $610.20 million 25.70 $122.20 million $0.79 106.90
Richmont Mines $127.39 million 4.81 $9.41 million $0.22 43.64

Franco-Nevada has higher revenue and earnings than Richmont Mines. Richmont Mines is trading at a lower price-to-earnings ratio than Franco-Nevada, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Franco-Nevada and Richmont Mines, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franco-Nevada 0 6 5 0 2.45
Richmont Mines 0 1 1 0 2.50

Franco-Nevada currently has a consensus target price of $84.89, indicating a potential upside of 0.52%. Given Franco-Nevada’s higher possible upside, equities analysts plainly believe Franco-Nevada is more favorable than Richmont Mines.

Volatility and Risk

Franco-Nevada has a beta of -0.14, meaning that its stock price is 114% less volatile than the S&P 500. Comparatively, Richmont Mines has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Dividends

Franco-Nevada pays an annual dividend of $0.92 per share and has a dividend yield of 1.1%. Richmont Mines does not pay a dividend. Franco-Nevada pays out 116.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franco-Nevada has increased its dividend for 4 consecutive years.

Institutional & Insider Ownership

59.9% of Franco-Nevada shares are owned by institutional investors. Comparatively, 53.8% of Richmont Mines shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Franco-Nevada beats Richmont Mines on 11 of the 16 factors compared between the two stocks.

About Franco-Nevada

Franco-Nevada Corporation (Franco-Nevada) is a gold-focused royalty and stream company. The Company has interests in silver, platinum group metals, oil and gas and other resource assets. The Company is engaged in resource sector royalty/stream acquisitions and management activities. It has a portfolio of properties in the United States, Canada, Mexico, Peru, Chile and Africa. Its properties in the United States include Goldstrike, Stillwater, Gold Quarry, Marigold, Fire Creek/Midas, Bald Mountain, South Arturo and Other. Its properties in Canada include Sudbury, Detour Lake, Golden Highway, Musselwhite, Hemlo, Kirkland Lake, Timmins West, Canadian Malartic and Other. Its properties in Latin America include Antapaccay, Antamina, Candelaria, Guadalupe-Palmarejo and Other. Its properties in Rest of World include Mine Waste Solutions (MWS), Sabodala, Subika, Tasiast, Karma, Duketon, Edikan and Other.

About Richmont Mines

Richmont Mines Inc. is a mining company. The Company is engaged in mining, exploration and development of mining properties, principally gold. The Company operates gold mines at various sites in Quebec and Ontario. The Company’s segments include Quebec and Ontario. The Company is engaged in producing gold from the Island Gold Mine in Ontario and the Beaufor Mine in Quebec. The Island Gold mine is located 83 kilometers northeast of Wawa, Ontario. It is part of the Island Gold Project, which is divided into nine parts (properties) comprising 219 patented, leased and staked claims covering 7,772 hectares, mainly within the townships of Finan and Jacobson. The Island Gold Project is located in the Michipicoten Greenstone Belt. The Beaufor Mine is located 25 kilometers northeast of Val-d’Or, Quebec. The Camflo mill has rated capacity of 1,200 short tons per day. It is located at Malartic, Quebec. The 7.58 square kilometers Wasamac property is located in the west of Rouyn-Noranda, Quebec.

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