Analyzing Alamos Gold (AGI) and Randgold Resources Limited (GOLD)

Alamos Gold (NYSE: AGI) and Randgold Resources Limited (NASDAQ:GOLD) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Risk and Volatility

Alamos Gold has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, Randgold Resources Limited has a beta of -0.05, suggesting that its stock price is 105% less volatile than the S&P 500.

Earnings and Valuation

This table compares Alamos Gold and Randgold Resources Limited’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alamos Gold $510.10 million 4.17 $153.90 million ($0.05) -141.57
Randgold Resources Limited N/A N/A N/A $3.13 31.53

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

Analyst Ratings

This is a breakdown of recent recommendations for Alamos Gold and Randgold Resources Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alamos Gold 0 2 1 0 2.33
Randgold Resources Limited 1 7 6 0 2.36

Alamos Gold currently has a consensus price target of $10.67, suggesting a potential upside of 50.66%. Randgold Resources Limited has a consensus price target of $102.33, suggesting a potential upside of 3.70%. Given Alamos Gold’s higher possible upside, equities analysts clearly believe Alamos Gold is more favorable than Randgold Resources Limited.

Dividends

Alamos Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Randgold Resources Limited pays an annual dividend of $0.98 per share and has a dividend yield of 1.0%. Alamos Gold pays out -40.0% of its earnings in the form of a dividend. Randgold Resources Limited pays out 31.3% 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.

Institutional & Insider Ownership

63.3% of Alamos Gold shares are held by institutional investors. Comparatively, 35.7% of Randgold Resources Limited shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Alamos Gold -2.61% 0.44% 0.33%
Randgold Resources Limited 22.75% 7.89% 7.33%

Summary

Randgold Resources Limited beats Alamos Gold on 7 of the 12 factors compared between the two stocks.

About Alamos Gold

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.

About Randgold Resources Limited

Randgold Resources Limited is engaged in gold mining, exploration and related activities. The Company’s activities are focused on West and Central Africa. The Company operates through the gold mining segment. The Company operates various mines, such as Morila, Loulo, Gounkoto, Tongon and Kibali. The Company is exploring in African countries, such as Mali, Senegal, Cote d’Ivoire and the Democratic Republic of Congo (DRC). The Company also holds an interest in the Massawa project. The Company holds Morila Limited, which holds interests in the Morila mine in Mali. As of December 31, 2016, Morila mine has produced 122,370 ounces (oz) of gold. The Company holds a controlling interest in the Loulo mine, located in Mali, through Societe des Mines de Loulo SA (Loulo). The Loulo mine is mining from over two underground mines. As of December 31, 2016, Loulo mine has produced 350,604 oz of gold. It has a controlling interest in the Gounkoto mine through Societe des Mines de Gounkoto SA.

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