Reviewing Yamana Gold (AUY) & Osisko Gold Royalties (OR)

Yamana Gold (NYSE: AUY) and Osisko Gold Royalties (NYSE:OR) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Insider & Institutional Ownership

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46.5% of Yamana Gold shares are held by institutional investors. Comparatively, 48.0% of Osisko Gold Royalties shares are held by institutional investors. 2.7% of Yamana Gold shares are held by company 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.

Profitability

This table compares Yamana Gold and Osisko Gold Royalties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yamana Gold -10.44% 1.87% 0.97%
Osisko Gold Royalties -20.24% 1.45% 1.18%

Earnings & Valuation

This table compares Yamana Gold and Osisko Gold Royalties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Yamana Gold $1.80 billion 1.57 -$194.40 million $0.08 37.25
Osisko Gold Royalties $164.41 million 9.53 -$32.78 million $0.14 71.64

Osisko Gold Royalties has lower revenue, but higher earnings than Yamana Gold. Yamana Gold is trading at a lower price-to-earnings ratio than Osisko Gold Royalties, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Yamana Gold and Osisko Gold Royalties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yamana Gold 0 4 5 0 2.56
Osisko Gold Royalties 0 1 4 0 2.80

Yamana Gold presently has a consensus target price of $3.67, suggesting a potential upside of 23.04%. Osisko Gold Royalties has a consensus target price of $19.67, suggesting a potential upside of 96.08%. Given Osisko Gold Royalties’ stronger consensus rating and higher probable upside, analysts clearly believe Osisko Gold Royalties is more favorable than Yamana Gold.

Dividends

Yamana Gold pays an annual dividend of $0.02 per share and has a dividend yield of 0.7%. Osisko Gold Royalties pays an annual dividend of $0.16 per share and has a dividend yield of 1.6%. Yamana Gold pays out 25.0% of its earnings in the form of a dividend. Osisko Gold Royalties pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Yamana Gold has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Osisko Gold Royalties has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.

Summary

Osisko Gold Royalties beats Yamana Gold on 9 of the 16 factors compared between the two stocks.

About Yamana Gold

Yamana Gold Inc. operates as a gold producer with gold production, gold development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile, and Argentina. It primarily sells precious metals, including gold, silver, and copper. The company was formerly known as Yamana Resources Inc. and changed its name to Yamana Gold Inc. in July 2003. Yamana Gold Inc. was founded in 1980 and is based in Toronto, Canada.

About Osisko Gold Royalties

Osisko Gold Royalties Ltd acquires and manages precious metal and other royalties, streams, and similar interests in Canada and internationally. Its assets include the 5% net smelter return (NSR) royalty on the Canadian Malartic mine; the 2.0% to 3.5% NSR royalty on the Eleonore mine; a 9.6% diamond stream on the Renard diamond mine; a 4% gold and silver stream on the Brucejack gold and silver mine; and a silver stream on the Gibraltar mine, all located in Canada. The company also has a 100% silver stream on the Mantos Blancos copper mine in Chile. It holds a portfolio of approximately 130 royalties, streams, and precious metal offtakes in North America; and owns rights to participate in future royalty/stream financings on various projects primarily in Canada. Osisko Gold Royalties Ltd is headquartered in Montreal, Canada.

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