Pan American Silver (NYSE:PAAS – Get Free Report) and Gold Royalty (NYSE:GROY – Get Free Report) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.
Analyst Recommendations
This is a summary of current ratings and price targets for Pan American Silver and Gold Royalty, as provided by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Pan American Silver | 0 | 1 | 4 | 0 | 2.80 |
Gold Royalty | 0 | 0 | 3 | 0 | 3.00 |
Pan American Silver currently has a consensus price target of $25.42, indicating a potential upside of 18.77%. Gold Royalty has a consensus price target of $3.25, indicating a potential upside of 166.39%. Given Gold Royalty’s stronger consensus rating and higher probable upside, analysts clearly believe Gold Royalty is more favorable than Pan American Silver.
Institutional and Insider Ownership
Volatility and Risk
Pan American Silver has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, Gold Royalty has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.
Earnings & Valuation
This table compares Pan American Silver and Gold Royalty”s top-line revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Pan American Silver | $2.67 billion | 2.91 | -$103.70 million | ($0.17) | -125.88 |
Gold Royalty | $7.76 million | 26.57 | -$26.76 million | ($0.13) | -9.38 |
Gold Royalty has lower revenue, but higher earnings than Pan American Silver. Pan American Silver is trading at a lower price-to-earnings ratio than Gold Royalty, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Pan American Silver and Gold Royalty’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Pan American Silver | -2.37% | 3.07% | 2.01% |
Gold Royalty | -252.16% | 0.46% | 0.35% |
Dividends
Pan American Silver pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. Gold Royalty pays an annual dividend of $0.01 per share and has a dividend yield of 0.8%. Pan American Silver pays out -235.3% of its earnings in the form of a dividend. Gold Royalty pays out -7.7% 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. Pan American Silver is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Pan American Silver beats Gold Royalty on 10 of the 16 factors compared between the two stocks.
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.
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.
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