Royal Gold (NASDAQ: RGLD) and Alio Gold (NYSE:ALO) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Analyst Ratings

This is a breakdown of recent recommendations for Royal Gold and Alio Gold, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Gold 0 6 6 0 2.50
Alio Gold 0 1 0 0 2.00

Royal Gold presently has a consensus price target of $92.35, indicating a potential upside of 1.57%. Given Royal Gold’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Royal Gold is more favorable than Alio Gold.

Profitability

This table compares Royal Gold and Alio Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Gold 23.03% 4.19% 3.09%
Alio Gold N/A N/A N/A

Institutional & Insider Ownership

70.4% of Royal Gold shares are owned by institutional investors. 1.4% of Royal Gold shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Royal Gold pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. Alio Gold does not pay a dividend. Royal Gold pays out 61.5% of its earnings in the form of a dividend. Alio Gold has raised its dividend for 12 consecutive years.

Valuation & Earnings

This table compares Royal Gold and Alio Gold’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Royal Gold $439.05 million 13.53 $305.58 million $1.56 58.28
Alio Gold $121.56 million 1.50 $42.14 million N/A N/A

Royal Gold has higher revenue and earnings than Alio Gold.

Summary

Royal Gold beats Alio Gold on 13 of the 15 factors compared between the two stocks.

Royal Gold Company Profile

Royal Gold, Inc., together with its subsidiaries, is engaged in acquiring and managing precious metal streams, royalties and similar interests. The Company operates through two segments: Acquisition and Management of Stream Interests, and Acquisition and Management of Royalty Interests. Its assets are located in Canada, Chile, Dominican Republic, Mexico, the United States, Africa, Australia and Other. As of June 30, 2016, the Company owned stream interests on four producing properties and three development-stage properties. It has investments in stream interests relating to Pueblo Viejo, Andacollo, Wassa and Prestea, and Rainy River. As of June 30, 2016, the Company owned royalty interests on 34 producing properties, 21 development-stage properties and 131 exploration-stage properties, of which it considered 50 to be evaluation-stage projects.

Alio Gold Company Profile

Alio Gold Inc, formerly Timmins Gold Corp, is a Canada-based gold producer engaged in the operation, development, exploration and acquisition of resource properties in Mexico through its subsidiaries, Timmins Goldcorp Mexico, S.A. de C.V. and Molimentales del Noroeste, S.A. de C.V. (MdN). MdN owns the San Francisco Mine in Sonora, Mexico. MdN also owns the Caballo Blanco Property, an exploration and evaluation asset in Veracruz, Mexico. The Mine and the La Chicharra pit are collectively known as the Gold Property. The Company also holds the Ana Paula gold project, which is an advanced stage development project in the Guerrero Gold Belt. The Guerrero Gold Belt project consists of over two claims totaling approximately 4,200 hectares at the north-west end of the Guerrero Gold Belt, with approximately 38,000 additional hectares in the surrounding area. Ana Paula is located in the north central part of the State of Guerrero in southern Mexico, 180 kilometers from Mexico City.

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