Analyzing Loncor Gold (OTCMKTS:LONCF) and Royal Gold (NASDAQ:RGLD)

Loncor Gold (OTCMKTS:LONCF) and Royal Gold (NASDAQ:RGLD) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Loncor Gold	N/A	-20.25%	-18.98%
Royal Gold	45.26%	11.89%	9.70%

Risk and Volatility

Loncor Gold has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Royal Gold has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Institutional and Insider Ownership

83.7% of Royal Gold shares are owned by institutional investors. 22.1% of Loncor Gold shares are owned by insiders. Comparatively, 0.5% of Royal Gold shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Loncor Gold and Royal Gold, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Loncor Gold	0	0	0	0	0.00
Royal Gold	1	3	7	0	2.55

Royal Gold has a consensus target price of $251.50, indicating a potential downside of 12.50%. Given Royal Gold’s stronger consensus rating and higher possible upside, analysts plainly believe Royal Gold is more favorable than Loncor Gold.

Earnings and Valuation

This table compares Loncor Gold and Royal Gold”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Loncor Gold	N/A	N/A	-$4.16 million	($0.03)	-33.83
Royal Gold	$1.03 billion	23.66	$467.27 million	$6.81	42.21

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

Summary

Royal Gold beats Loncor Gold on 11 of the 13 factors compared between the two stocks.

About Loncor Gold

Loncor Gold Inc., a gold exploration company, engages in the acquisition, exploration, and development of precious metal projects in the Ngayu greenstone belt in the northeast of the Democratic Republic of the Congo and Canada. It explores for gold and platinum deposits. The company holds 84.68% interest in the Adumbi project, which consist of two mining licenses covering an area of 361 square kilometers located within the Archaean Ngayu Greenstone Belt in the Ituri and Haut Uele provinces in northeastern Congo. It also holds 100% interest in the Isiro properties that consist of 11 exploration permits covering an area of 1,884 square kilometers situated in the province of Haut Uele, northeastern Congo. In addition, Loncor Gold Inc. owns interest in North Kivu, Ngayu, Devon, Navarro, and Yindi projects. The company was formerly known as Loncor Resources Inc. and changed its name to Loncor Gold Inc. in June 2021. Loncor Gold Inc. was founded in 1993 and is headquartered in Toronto, Canada.

About Royal Gold

Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metal streams, royalties, and related interests. The company engages in acquiring stream and royalty interests or to finance projects that are in production, development, or in the exploration stage in exchange for stream or royalty interests, which primarily consists of gold, silver, copper, nickel, zinc, lead, and other metals. Its stream and royalty interests on properties are located in the United States, Canada, Chile, the Dominican Republic, Australia, Africa, Mexico, Botswana, and internationally. Royal Gold, Inc. was incorporated in 1981 and is headquartered in Denver, Colorado.