Agnico Eagle Mines (AEM) vs. Alamos Gold (AGI) Critical Survey

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

Valuation and Earnings

This table compares Agnico Eagle Mines and Alamos Gold’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Agnico Eagle Mines $2.14 billion 4.91 $158.82 million $1.17 38.74
Alamos Gold $482.20 million 5.35 -$17.90 million $0.02 331.50

Agnico Eagle Mines has higher revenue and earnings than Alamos Gold. Agnico Eagle Mines 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 Recommendations

This is a breakdown of current ratings and recommmendations for Agnico Eagle Mines and Alamos Gold, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agnico Eagle Mines 0 3 6 0 2.67
Alamos Gold 0 4 2 0 2.33

Agnico Eagle Mines presently has a consensus target price of $55.36, indicating a potential upside of 22.15%. Alamos Gold has a consensus target price of $10.38, indicating a potential upside of 56.49%. Given Alamos Gold’s higher possible upside, analysts plainly believe Alamos Gold is more favorable than Agnico Eagle Mines.

Institutional & Insider Ownership

58.3% of Agnico Eagle Mines shares are held by institutional investors. Comparatively, 63.0% of Alamos Gold shares are held by institutional investors. 0.5% of Agnico Eagle Mines shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Agnico Eagle Mines 12.23% 5.83% 3.66%
Alamos Gold 2.08% 1.07% 0.82%

Dividends

Agnico Eagle Mines pays an annual dividend of $0.44 per share and has a dividend yield of 1.0%. Alamos Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Agnico Eagle Mines pays out 37.6% 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. Agnico Eagle Mines has increased its dividend for 5 consecutive years. Agnico Eagle Mines is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Agnico Eagle Mines beats Alamos Gold on 12 of the 16 factors compared between the two stocks.

Agnico Eagle Mines Company Profile

Agnico Eagle Mines Ltd is a Canada-based gold producer with mining operations in northwestern Quebec, northern Mexico, northern Finland and Nunavut, as well as exploration activities in Canada, Europe, Latin America and the United States. It operates through the business units: Northern Business, which consists of its operations in Canada and Finland, such as the LaRonde mine, the Lapa mine, the Goldex mine, the Meadowbank mine, the Meliadine project and the Malartic Mine in Canada, as well as the Kittila mine in Finland; Southern Business, which consists of its operations in Mexico, such as the Pinos Altos mine that includes the Creston Mascota deposit and the La India mine owned by its indirect subsidiary, as well as Exploration Group, which focuses on the identification of new mineral reserves and mineral resources, and new development opportunities in gold producing regions. Its exploration activities are concentrated in Canada, Europe, Latin America and the United States.

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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