Gold Resource (NYSE:GORO) versus Norsk Hydro ASA (OTCMKTS:NHYDY) Financial Analysis

Norsk Hydro ASA (OTCMKTS:NHYDY) and Gold Resource (NYSE:GORO) are both materials companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Volatility & Risk

Norsk Hydro ASA has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Gold Resource has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Profitability

This table compares Norsk Hydro ASA and Gold Resource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norsk Hydro ASA	4.90%	11.46%	6.05%
Gold Resource	-61.31%	-35.25%	-16.15%

Dividends

Norsk Hydro ASA pays an annual dividend of $0.22 per share and has a dividend yield of 2.4%. Gold Resource pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. Norsk Hydro ASA pays out 42.3% of its earnings in the form of a dividend. Gold Resource pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Norsk Hydro ASA is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Norsk Hydro ASA and Gold Resource”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norsk Hydro ASA	$20.05 billion	0.91	$647.52 million	$0.52	17.66
Gold Resource	$55.34 million	10.34	-$16.02 million	$0.05	70.68

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

Insider and Institutional Ownership

0.0% of Norsk Hydro ASA shares are held by institutional investors. Comparatively, 18.4% of Gold Resource shares are held by institutional investors. 0.0% of Norsk Hydro ASA shares are held by insiders. Comparatively, 1.3% of Gold Resource shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Norsk Hydro ASA and Gold Resource, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norsk Hydro ASA	2	7	2	1	2.17
Gold Resource	0	1	1	0	2.50

Gold Resource has a consensus target price of $1.75, indicating a potential downside of 50.48%. Given Gold Resource’s stronger consensus rating and higher probable upside, analysts plainly believe Gold Resource is more favorable than Norsk Hydro ASA.

Summary

Norsk Hydro ASA beats Gold Resource on 11 of the 17 factors compared between the two stocks.

About Norsk Hydro ASA

Norsk Hydro ASA engages in the power production, bauxite extraction, alumina refining, aluminium smelting, and recycling activities; and provision of extruded solutions worldwide. It operates through Hydro Bauxite & Alumina, Hydro Aluminium Metal, Hydro Metal Markets, Hydro Extrusions, and Hydro Energy segments. The Hydro Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, primarily the sale of alumina. The Hydro Aluminium Metal segment is involved in the primary aluminum production casting activities. This segment principally offers extrusion ingots, foundry alloys, and sheet and standard ingots. The Metal Markets segment sells products from the company’s primary metal plants; operates recyclers; and trades in physical and financial metals. The Hydro Extrusions segment offers extrusion profiles, building systems, and precision tubing products for construction, automotive and heating, and ventilation and air conditioning sectors, as well as operates recycling facilities. The Hydro Energy segment engages in the trading and wholesale business in Brazil; energy sourcing operations; and operation of power stations in Norway, as well as renewable energy production, such as wind and solar, battery materials, and green hydrogen. Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.

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.