New Found Gold (NYSE:NFGC – Get Free Report) and Gold Resource (NYSE:GORO – Get Free Report) are both small-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.
Risk and Volatility
New Found Gold has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Gold Resource has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.
Profitability
This table compares New Found Gold and Gold Resource’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| New Found Gold | N/A | -82.80% | -68.88% |
| Gold Resource | -61.31% | -35.25% | -16.15% |
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| New Found Gold | N/A | N/A | -$59.18 million | ($0.20) | -8.00 |
| Gold Resource | $59.38 million | 1.49 | -$16.02 million | ($0.63) | -1.03 |
Gold Resource has higher revenue and earnings than New Found Gold. New Found Gold 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 Ratings
This is a breakdown of current ratings and recommmendations for New Found Gold and Gold Resource, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| New Found Gold | 0 | 0 | 1 | 0 | 3.00 |
| Gold Resource | 0 | 0 | 1 | 0 | 3.00 |
New Found Gold currently has a consensus price target of $5.00, suggesting a potential upside of 212.50%. Gold Resource has a consensus price target of $1.25, suggesting a potential upside of 92.31%. Given New Found Gold’s higher probable upside, equities analysts plainly believe New Found Gold is more favorable than Gold Resource.
Insider & Institutional Ownership
3.4% of New Found Gold shares are held by institutional investors. Comparatively, 18.4% of Gold Resource shares are held by institutional investors. 1.3% of Gold Resource shares are held 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.
Summary
Gold Resource beats New Found Gold on 7 of the 11 factors compared between the two stocks.
About New Found Gold
New Found Gold Corp., a mineral exploration company, engages in the identification, evaluation, acquisition, and exploration of mineral properties in the Provinces of Newfoundland and Labrador, and Ontario. It primarily explores for gold deposit. The company holds 100% interests in the Queensway project that includes 96 mineral licenses and 6,659 claims covering an area of 166,475 hectares of land located near Gander, Newfoundland; and the Kingsway project located in Gander, Newfoundland. The company was formerly known as Palisade Resources Corp. and changed its name to New Found Gold Corp. in June 2017. New Found Gold Corp. was incorporated in 2016 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.
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