DRDGOLD (NYSE: DRD) and Alamos Gold Inc (US) (NYSE:AGI) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.
Insider and Institutional Ownership
18.5% of DRDGOLD shares are owned by institutional investors. Comparatively, 50.8% of Alamos Gold Inc (US) shares are owned by institutional investors. 1.0% of DRDGOLD shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and price targets for DRDGOLD and Alamos Gold Inc (US), as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alamos Gold Inc (US)||0||3||2||0||2.40|
Alamos Gold Inc (US) has a consensus target price of $9.80, indicating a potential upside of 80.48%. Given Alamos Gold Inc (US)’s higher possible upside, analysts clearly believe Alamos Gold Inc (US) is more favorable than DRDGOLD.
This table compares DRDGOLD and Alamos Gold Inc (US)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alamos Gold Inc (US)||2.08%||1.07%||0.82%|
DRDGOLD pays an annual dividend of $0.03 per share and has a dividend yield of 1.1%. Alamos Gold Inc (US) pays an annual dividend of $0.02 per share and has a dividend yield of 0.4%. DRDGOLD pays out 100.0% 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 Inc (US) pays out 100.0% 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 Inc (US) has raised its dividend for 5 consecutive years.
Valuation & Earnings
This table compares DRDGOLD and Alamos Gold Inc (US)’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|DRDGOLD||$172.22 million||0.69||$1.00 million||$0.03||94.33|
|Alamos Gold Inc (US)||$482.20 million||4.38||-$17.90 million||$0.02||271.50|
DRDGOLD has higher earnings, but lower revenue than Alamos Gold Inc (US). DRDGOLD is trading at a lower price-to-earnings ratio than Alamos Gold Inc (US), indicating that it is currently the more affordable of the two stocks.
Alamos Gold Inc (US) beats DRDGOLD on 10 of the 14 factors compared between the two stocks.
DRDGOLD Company Profile
DRDGOLD Limited is a gold mining company. The Company is engaged in gold production by tailings retreatment. The Company is focused on the recovery of lower-risk, higher-margin ounces primarily from its metallurgical plant located approximately 50 kilometers east of Johannesburg in Brakpan. The Company owns approximately 100% of its holding company, Ergo Mining Operations Proprietary Limited (EMO). Ergo Mining Proprietary Limited (Ergo) is owned by EMO. Ergo has a vast footprint adjacent to Johannesburg on the central and eastern Witwatersrand of South Africa. Its assets cover an area of approximately 62 kilometers from east to west and over 25 kilometers from north to south. The Ergo operation has over two metallurgical plants in operation, including Knights plant and The Ergo plant. The Knights plant in Germiston is treating the Cason dump and depositing waste on the Brakpan tailings facility (BTF). The Ergo plant has a total treatment capacity of 300,000 tons per month (tpm).
Alamos Gold Inc (US) 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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