Analyzing Mesabi Trust (MSB) and Royal Gold (RGLD)

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

Valuation & Earnings

This table compares Mesabi Trust and Royal Gold’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mesabi Trust $34.56 million 10.17 $33.49 million N/A N/A
Royal Gold $459.04 million 10.81 -$113.13 million $1.76 43.03

Mesabi Trust has higher earnings, but lower revenue than Royal Gold.

Dividends

Mesabi Trust pays an annual dividend of $3.76 per share and has a dividend yield of 14.0%. Royal Gold pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Royal Gold pays out 56.8% of its earnings in the form of a dividend. Mesabi Trust has increased its dividend for 4 consecutive years and Royal Gold has increased its dividend for 13 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Mesabi Trust 97.13% 231.66% 156.65%
Royal Gold -28.39% 4.66% 3.64%

Insider & Institutional Ownership

17.1% of Mesabi Trust shares are held by institutional investors. Comparatively, 75.7% of Royal Gold shares are held by institutional investors. 0.3% of Mesabi Trust shares are held by company insiders. Comparatively, 1.0% of Royal Gold shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Mesabi Trust has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Mesabi Trust and Royal Gold, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mesabi Trust 0 0 0 0 N/A
Royal Gold 0 5 6 0 2.55

Royal Gold has a consensus price target of $95.05, indicating a potential upside of 25.51%. Given Royal Gold’s higher probable upside, analysts plainly believe Royal Gold is more favorable than Mesabi Trust.

About Mesabi Trust

Mesabi Trust, a royalty trust, engages in iron ore mining business in the United States. The company was founded in 1919 and is based in New York, New York.

About Royal Gold

Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metal streams, royalties, and related interests. It focuses on acquiring stream and royalty interests or to finance projects that are in production or in development stage in exchange for stream or royalty interests, which primarily consists of gold, silver, copper, nickel, zinc, lead, cobalt, and molybdenum. As of August 1, 2018, the company owned interests in 191 properties on 6 continents, including interests on 40 producing mines and 18 development stage projects. Its principal producing stream and royalty interests on properties are located in the United States, Canada, Chile, the Dominican Republic, Ghana, and Mexico. The company also holds stream and royalty interests in mines and projects in other countries, including Argentina, Australia, Bolivia, Brazil, Burkina Faso, Guatemala, Honduras, Macedonia, Nicaragua, Peru, Russia, Spain, and Tunisia. Royal Gold, Inc. was founded in 1981 and is based in Denver, Colorado.

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