Head to Head Analysis: Randgold Resources Limited (GOLD) and Alamos Gold (AGI)

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

Dividends

Randgold Resources Limited pays an annual dividend of $0.98 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%. Randgold Resources Limited pays out 31.3% of its earnings in the form of a dividend. Alamos Gold pays out -40.0% 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.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Randgold Resources Limited N/A N/A N/A $3.13 31.17
Alamos Gold $510.10 million 4.17 $153.90 million ($0.05) -141.37

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 Recommendations

This is a summary of recent ratings and price targets for Randgold Resources Limited and Alamos Gold, as reported by MarketBeat.

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

Randgold Resources Limited presently has a consensus target price of $102.33, indicating a potential upside of 4.88%. Alamos Gold has a consensus target price of $10.67, indicating a potential upside of 50.87%. Given Alamos Gold’s higher possible upside, analysts clearly believe Alamos Gold is more favorable than Randgold Resources Limited.

Insider & Institutional Ownership

35.7% of Randgold Resources Limited shares are held by institutional investors. Comparatively, 63.3% 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 will outperform the market over the long term.

Volatility and Risk

Randgold Resources Limited has a beta of -0.05, suggesting that its stock price is 105% less volatile than the S&P 500. Comparatively, Alamos Gold has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.

Profitability

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

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

Summary

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

Randgold Resources Limited Company Profile

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.

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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