Contrasting Barrick Gold (ABX) and Alamos Gold (AGI)

Barrick Gold (NYSE: ABX) and Alamos Gold (NYSE:AGI) are both mid-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Dividends

Barrick Gold pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Alamos Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Barrick Gold pays out 6.5% of its earnings in the form of a dividend. Alamos Gold 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. Barrick Gold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Barrick Gold and Alamos Gold’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Barrick Gold $8.56 billion 1.97 $655.00 million $1.86 7.78
Alamos Gold $482.20 million 5.35 -$17.90 million $0.02 331.50

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

Analyst Ratings

This is a summary of current recommendations and price targets for Barrick Gold and Alamos Gold, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barrick Gold 1 11 2 0 2.07
Alamos Gold 0 4 2 0 2.33

Barrick Gold presently has a consensus price target of $18.41, indicating a potential upside of 27.22%. Alamos Gold has a consensus price target of $10.38, indicating a potential upside of 56.49%. Given Alamos Gold’s stronger consensus rating and higher possible upside, analysts plainly believe Alamos Gold is more favorable than Barrick Gold.

Insider and Institutional Ownership

55.7% of Barrick Gold shares are held by institutional investors. Comparatively, 63.0% of Alamos Gold shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Barrick Gold has a beta of -0.42, indicating that its stock price is 142% less volatile than the S&P 500. Comparatively, Alamos Gold has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Barrick Gold 25.72% 7.73% 3.37%
Alamos Gold 2.08% 1.07% 0.82%

Summary

Barrick Gold beats Alamos Gold on 8 of the 14 factors compared between the two stocks.

About Barrick Gold

Barrick Gold Corporation (Barrick) is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company’s segments include Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero, Turquoise Ridge, Acacia Mining plc (Acacia), Pascua-Lama and Other Mines. Goldstrike, Cortez, Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines. The Company, through its subsidiary, Acacia, owns gold mines and exploration properties in Africa. It also holds interest in gold mines, including Porgera and Kalgoorlie, and copper mines, such as Zaldivar and Lumwana. The Pascua-Lama project is located on the border between Chile and Argentina. The Company has nine producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia and the Dominican Republic.

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.

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