Pan American Silver (NYSE:PAAS) & Gold Resource (NYSE:GORO) Head-To-Head Contrast

Gold Resource (NYSE:GORO) and Pan American Silver (NYSE:PAAS) are both materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.

Dividends

Gold Resource pays an annual dividend of $0.04 per share and has a dividend yield of 1.2%. Pan American Silver pays an annual dividend of $0.74 per share and has a dividend yield of 1.8%. 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. Pan American Silver pays out 22.4% of its earnings in the form of a dividend. Pan American Silver has increased its dividend for 2 consecutive years. Pan American Silver is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

18.4% of Gold Resource shares are held by institutional investors. Comparatively, 55.4% of Pan American Silver shares are held by institutional investors. 1.3% of Gold Resource shares are held by company insiders. Comparatively, 12.9% of Pan American Silver shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Gold Resource and Pan American Silver”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gold Resource	$55.34 million	9.65	-$16.02 million	$0.05	66.00
Pan American Silver	$3.62 billion	4.59	$978.00 million	$3.31	12.12

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

Risk and Volatility

Gold Resource has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Pan American Silver has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Profitability

This table compares Gold Resource and Pan American Silver’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gold Resource	-61.31%	-35.25%	-16.15%
Pan American Silver	32.04%	20.01%	14.48%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Gold Resource and Pan American Silver, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gold Resource	0	1	1	0	2.50
Pan American Silver	0	3	7	0	2.70

Gold Resource currently has a consensus price target of $1.75, suggesting a potential downside of 46.97%. Pan American Silver has a consensus price target of $67.71, suggesting a potential upside of 68.82%. Given Pan American Silver’s stronger consensus rating and higher probable upside, analysts clearly believe Pan American Silver is more favorable than Gold Resource.

Summary

Pan American Silver beats Gold Resource on 15 of the 17 factors compared between the two stocks.

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.

About Pan American Silver

Pan American Silver Corp. engages in the exploration, mine development, extraction, processing, refining, and reclamation of silver, gold, zinc, lead, and copper mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil. The company was formerly known as Pan American Minerals Corp. and changed its name to Pan American Silver Corp. in April 1995. Pan American Silver Corp. was incorporated in 1979 and is headquartered in Vancouver, Canada.