Financial Review: Fortuna Silver Mines (NYSE:FSM) versus DRDGOLD (DRD)

DRDGOLD (NYSE:DRD) and Fortuna Silver Mines (NYSE:FSM) are both small-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of current ratings for DRDGOLD and Fortuna Silver Mines, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DRDGOLD 0 0 0 0 N/A
Fortuna Silver Mines 0 0 2 0 3.00

Insider & Institutional Ownership

18.0% of DRDGOLD shares are owned by institutional investors. Comparatively, 42.8% of Fortuna Silver Mines shares are owned by institutional investors. 1.0% of DRDGOLD shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

DRDGOLD has a beta of -1.93, meaning that its stock price is 293% less volatile than the S&P 500. Comparatively, Fortuna Silver Mines has a beta of 0.07, meaning that its stock price is 93% less volatile than the S&P 500.

Earnings and Valuation

This table compares DRDGOLD and Fortuna Silver Mines’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DRDGOLD $194.50 million 0.52 $500,000.00 N/A N/A
Fortuna Silver Mines $268.11 million 2.64 $66.30 million $0.31 14.29

Fortuna Silver Mines has higher revenue and earnings than DRDGOLD.

Profitability

This table compares DRDGOLD and Fortuna Silver Mines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DRDGOLD N/A N/A N/A
Fortuna Silver Mines 24.48% 8.57% 6.95%

Dividends

DRDGOLD pays an annual dividend of $0.03 per share and has a dividend yield of 1.3%. Fortuna Silver Mines does not pay a dividend. DRDGOLD has raised its dividend for 5 consecutive years.

Summary

Fortuna Silver Mines beats DRDGOLD on 9 of the 12 factors compared between the two stocks.

About DRDGOLD

DRDGOLD Limited engages in the retreatment, production, and sale of gold from surface tailings in South Africa. It recovers gold from surface tailings in the central and western Witwatersrand basin in Gauteng province. The company was founded in 1895 and is headquartered in Johannesburg, South Africa.

About Fortuna Silver Mines

Fortuna Silver Mines Inc. engages in the exploration, extraction, and processing of precious and base metal deposits in Latin America. It explores for silver, gold, lead, and zinc deposits. The company holds interests in the Caylloma mine located in southern Peru; and the San Jose mine situated in the state of Oaxaca in southern Mexico. It also develops the Lindero gold project located in northern Argentina. The company was formerly known as Fortuna Ventures Inc. and changed its name to Fortuna Silver Mines Inc. in June 2005. Fortuna Silver Mines Inc. was incorporated in 1990 and is based in Vancouver, Canada.

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