Critical Review: Gold Royalty (NYSE:GROY) vs. Pan American Silver (NYSE:PAAS)

Gold Royalty (NYSE:GROY) and Pan American Silver (NYSE:PAAS) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Volatility and Risk

Gold Royalty has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Pan American Silver has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Profitability

This table compares Gold Royalty and Pan American Silver’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gold Royalty	-252.16%	0.46%	0.35%
Pan American Silver	-2.37%	3.07%	2.01%

Insider and Institutional Ownership

33.8% of Gold Royalty shares are owned by institutional investors. Comparatively, 55.4% of Pan American Silver shares are owned by institutional investors. 12.9% of Pan American Silver shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Gold Royalty and Pan American Silver, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gold Royalty	0	0	3	0	3.00
Pan American Silver	0	1	3	0	2.75

Gold Royalty presently has a consensus target price of $3.25, suggesting a potential upside of 166.39%. Pan American Silver has a consensus target price of $25.42, suggesting a potential upside of 18.36%. Given Gold Royalty’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Gold Royalty is more favorable than Pan American Silver.

Valuation & Earnings

This table compares Gold Royalty and Pan American Silver”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gold Royalty	$3.05 million	67.63	-$26.76 million	($0.13)	-9.38
Pan American Silver	$2.67 billion	2.92	-$103.70 million	($0.17)	-126.32

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

Summary

Pan American Silver beats Gold Royalty on 7 of the 13 factors compared between the two stocks.

About Gold Royalty

Gold Royalty Corp., a precious metals-focused royalty company, provides financing solutions to the metals and mining industry. It focuses on acquiring royalties, streams, and similar interests at varying stages of the mine life cycle to build a portfolio offering near, medium, and longer-term returns for its investors. Gold Royalty Corp. was incorporated in 2020 and is headquartered in Vancouver, Canada.

About Pan American Silver

Pan American Silver Corp. engages in the exploration, mine development, extraction, processing, refining, and reclamation of silver, gold, zinc, lead, and copper mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil. The company was formerly known as Pan American Minerals Corp. and changed its name to Pan American Silver Corp. in April 1995. Pan American Silver Corp. was incorporated in 1979 and is headquartered in Vancouver, Canada.