Reviewing Alamos Gold (NYSE:AGI) & Gold Royalty (NYSE:GROY)

Alamos Gold (NYSE:AGI) and Gold Royalty (NYSE:GROY) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Dividends

Alamos Gold pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. Gold Royalty pays an annual dividend of $0.01 per share and has a dividend yield of 0.6%. Alamos Gold pays out 19.2% of its earnings in the form of a dividend. Gold Royalty pays out -5.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Gold Royalty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

64.3% of Alamos Gold shares are held by institutional investors. Comparatively, 33.8% of Gold Royalty shares are held by institutional investors. 0.5% of Alamos Gold 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.

Volatility & Risk

Alamos Gold has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Gold Royalty has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares Alamos Gold and Gold Royalty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alamos Gold	17.73%	8.52%	6.26%
Gold Royalty	-381.76%	-0.53%	-0.40%

Valuation & Earnings

This table compares Alamos Gold and Gold Royalty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alamos Gold	$1.12 billion	7.61	$210.00 million	$0.52	41.11
Gold Royalty	$6.50 million	40.44	-$26.76 million	($0.17)	-9.15

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Alamos Gold and Gold Royalty, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alamos Gold	0	2	4	0	2.67
Gold Royalty	0	0	2	0	3.00

Alamos Gold presently has a consensus price target of $25.06, indicating a potential upside of 17.25%. Gold Royalty has a consensus price target of $3.67, indicating a potential upside of 135.80%. Given Gold Royalty’s stronger consensus rating and higher probable upside, analysts clearly believe Gold Royalty is more favorable than Alamos Gold.

Summary

Alamos Gold beats Gold Royalty on 11 of the 16 factors compared between the two stocks.

About Alamos Gold

Alamos Gold Inc. engages in the acquisition, exploration, development, and extraction of precious metals in Canada and Mexico. The company primarily explores for gold deposits. It holds 100% interest in the Young-Davidson mine and Island Gold mine located in the Ontario, Canada; Mulatos mine located in the Sonora, Mexico; and Lynn Lake project situated in the Manitoba, Canada. The company also holds interest in the Quartz Mountain project located in the Oregon United states. Alamos Gold Inc. was founded in 2003 and is based in Toronto, Canada.

About Gold Royalty

Gold Royalty Corp., a precious metals-focused royalty company, provides financing solutions to the metals and mining industry. It focuses on acquiring royalties, streams, and similar interests at varying stages of the mine life cycle to build a portfolio offering near, medium, and longer-term returns for its investors. Gold Royalty Corp. was incorporated in 2020 and is headquartered in Vancouver, Canada.