Algoma Steel Group (NASDAQ:ASTL – Get Free Report) and Alamos Gold (NYSE:AGI – Get Free Report) are both materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.
Volatility and Risk
Algoma Steel Group has a beta of 1.64, suggesting that its stock price is 64% more volatile than the S&P 500. Comparatively, Alamos Gold has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and target prices for Algoma Steel Group and Alamos Gold, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Algoma Steel Group | 1 | 3 | 0 | 0 | 1.75 |
| Alamos Gold | 0 | 2 | 8 | 0 | 2.80 |
Profitability
This table compares Algoma Steel Group and Alamos Gold’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Algoma Steel Group | -71.60% | -110.49% | -25.74% |
| Alamos Gold | 52.64% | 19.28% | 13.47% |
Earnings & Valuation
This table compares Algoma Steel Group 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 | |
| Algoma Steel Group | $1.54 billion | 0.29 | -$704.89 million | ($7.35) | -0.57 |
| Alamos Gold | $1.81 billion | 8.10 | $885.80 million | $2.77 | 12.65 |
Alamos Gold has higher revenue and earnings than Algoma Steel Group. Algoma Steel Group is trading at a lower price-to-earnings ratio than Alamos Gold, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
72.0% of Algoma Steel Group shares are owned by institutional investors. Comparatively, 64.3% of Alamos Gold shares are owned by institutional investors. 0.5% of Alamos Gold shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Dividends
Algoma Steel Group pays an annual dividend of $0.05 per share and has a dividend yield of 1.2%. Alamos Gold pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Algoma Steel Group pays out -0.7% of its earnings in the form of a dividend. Alamos Gold pays out 5.8% 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. Algoma Steel Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Alamos Gold beats Algoma Steel Group on 12 of the 16 factors compared between the two stocks.
About Algoma Steel Group
Algoma Steel Group Inc. produces and sells steel products primarily in North America. The company provides flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural product manufacturers, and the light manufacturing and transportation industries; and plate steel products that consist of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, and military applications. Algoma Steel Group Inc. was founded in 1901 and is headquartered in Sault Ste. Marie, Canada.
About Alamos Gold
Alamos Gold Inc. engages in the acquisition, exploration, development, and extraction of precious metals in Canada and Mexico. The company primarily explores for gold deposits. It holds 100% interest in the Young-Davidson mine and Island Gold mine located in the Ontario, Canada; Mulatos mine located in the Sonora, Mexico; and Lynn Lake project situated in the Manitoba, Canada. The company also holds interest in the Quartz Mountain project located in the Oregon United states. Alamos Gold Inc. was founded in 2003 and is based in Toronto, Canada.
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