Analyzing Goldcorp (GG) and Alamos Gold (AGI)
Goldcorp (NYSE: GG) and Alamos Gold (NYSE:AGI) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.
Valuation and Earnings
This table compares Goldcorp and Alamos Gold’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Goldcorp||$3.52 billion||3.44||$1.33 billion||$0.55||25.15|
|Alamos Gold||$510.10 million||4.26||$153.90 million||($0.05)||-144.57|
Goldcorp has higher revenue and earnings than Alamos Gold. Alamos Gold is trading at a lower price-to-earnings ratio than Goldcorp, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for Goldcorp and Alamos Gold, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Goldcorp presently has a consensus target price of $16.64, suggesting a potential upside of 20.29%. Alamos Gold has a consensus target price of $10.67, suggesting a potential upside of 47.53%. Given Alamos Gold’s higher probable upside, analysts plainly believe Alamos Gold is more favorable than Goldcorp.
This table compares Goldcorp and Alamos Gold’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
54.0% of Goldcorp shares are owned by institutional investors. Comparatively, 63.3% of Alamos Gold shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Risk and Volatility
Goldcorp has a beta of -0.02, meaning that its share price is 102% less volatile than the S&P 500. Comparatively, Alamos Gold has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.
Goldcorp pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Alamos Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Goldcorp pays out 14.5% of its earnings in the form of a dividend. Alamos Gold pays out -40.0% 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. Alamos Gold has raised its dividend for 4 consecutive years.
Goldcorp beats Alamos Gold on 9 of the 16 factors compared between the two stocks.
Goldcorp Company Profile
Goldcorp Inc. is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company’s segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). The Company’s principal product is gold dore with the refined gold bullion sold primarily in the London spot market.
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.
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