Financial Analysis: Alamos Gold (AGI) & Franco-Nevada Corporation (FNV)
Alamos Gold (NYSE: AGI) and Franco-Nevada Corporation (NYSE:FNV) are both mid-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.
Insider & Institutional Ownership
63.3% of Alamos Gold shares are owned by institutional investors. Comparatively, 60.2% of Franco-Nevada Corporation shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares Alamos Gold and Franco-Nevada Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Alamos Gold has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Franco-Nevada Corporation has a beta of -0.07, indicating that its stock price is 107% less volatile than the S&P 500.
Valuation and Earnings
This table compares Alamos Gold and Franco-Nevada Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alamos Gold||$510.10 million||4.10||$153.90 million||($0.05)||-139.17|
|Franco-Nevada Corporation||$663.10 million||22.18||$511.30 million||$0.77||103.01|
Franco-Nevada Corporation has higher revenue and earnings than Alamos Gold. Alamos Gold is trading at a lower price-to-earnings ratio than Franco-Nevada Corporation, indicating that it is currently the more affordable of the two stocks.
Alamos Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Franco-Nevada Corporation pays an annual dividend of $0.92 per share and has a dividend yield of 1.2%. Alamos Gold pays out -40.0% of its earnings in the form of a dividend. Franco-Nevada Corporation pays out 119.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alamos Gold has increased its dividend for 4 consecutive years.
This is a summary of current ratings and recommmendations for Alamos Gold and Franco-Nevada Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Alamos Gold presently has a consensus target price of $10.67, suggesting a potential upside of 53.26%. Franco-Nevada Corporation has a consensus target price of $82.11, suggesting a potential upside of 3.52%. Given Alamos Gold’s higher possible upside, equities research analysts clearly believe Alamos Gold is more favorable than Franco-Nevada Corporation.
Franco-Nevada Corporation beats Alamos Gold on 10 of the 15 factors compared between the two stocks.
Alamos Gold Company Profile
Alamos Gold Inc. is a Canada-based mid-tier gold producer. The Company owns and operates the Mulatos Mine, as well as the Esperanza, Agi Dagi, Kirazli and Camyurt gold development projects. The Mulatos mine is located within the 30,536 hectares Salamandra group of concessions in the state of Sonora in northwest Mexico. The Esperanza Gold Project is a development stage asset located in south-central Mexico in the state of Morelos. Agi Dagi and Kirazli gold development projects are located in Canakkale Province on the Biga Peninsula of northwestern Turkey. The Camyurt project is located near southeast of Canakkale, Turkey. In addition, the Company owns a 100% interest in the Quartz Mountain Property, which is located on the northern extension of the prolific Basin and Range Province of Nevada in Oregon.
Franco-Nevada Corporation Company Profile
Franco-Nevada Corporation (Franco-Nevada) is a gold-focused royalty and stream company. The Company has interests in silver, platinum group metals, oil and gas and other resource assets. The Company is engaged in resource sector royalty/stream acquisitions and management activities. It has a portfolio of properties in the United States, Canada, Mexico, Peru, Chile and Africa. Its properties in the United States include Goldstrike, Stillwater, Gold Quarry, Marigold, Fire Creek/Midas, Bald Mountain, South Arturo and Other. Its properties in Canada include Sudbury, Detour Lake, Golden Highway, Musselwhite, Hemlo, Kirkland Lake, Timmins West, Canadian Malartic and Other. Its properties in Latin America include Antapaccay, Antamina, Candelaria, Guadalupe-Palmarejo and Other. Its properties in Rest of World include Mine Waste Solutions (MWS), Sabodala, Subika, Tasiast, Karma, Duketon, Edikan and Other.
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