Introduction
This paper examines certain key financial ratios for three companies’ which operate in the market of gold. Presented are analyses and comparisons of the companies for the three most recent years, 2004, 2005, 2006. The focal point of the original analysis was Royal Gold. Two other strong companies in the gold market are Newmont Mining and Barrick Gold Corporation.
Royal Gold, Inc. is a Denver, Colorado based company. It is primarily in the business of buying and selling gold royalties. Newmont Mining is also a Denver, Colorado company. Newmont is one of the world’s leading gold mining companies. Barrick Gold is headquartered in Toronto, Canada but is traded on both the Canadian stock exchange and the New York stock exchange. Barrick’s strategy is exploration and operating of gold and copper mines and a pipeline operation.
Royal Gold differs from Barrick and Newmont because Royal Gold does not operate and finance actual mining operations. Barrick and Newmont were selected because it is the quantity mined and the price of gold that unites them.
PE Ratio
PE Ratio
2006 2005 2004
Royal Gold Inc 34 62 34
Newmont Mining Corp 25 67 47
Barrick Gold Corp 17 35 40
The following is a visual graph of the data above.
The first financial ratio of the analysis is the Price to Earnings ratio (“P/E ratio”). The ratio is computed by divi ...