Head to Head Analysis: Wheaton Precious Metals (NYSE:WPM) & Gold Royalty (NYSE:GROY)

Gold Royalty (NYSE:GROY) and Wheaton Precious Metals (NYSE:WPM) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, valuation and institutional ownership.

Volatility and Risk

Gold Royalty has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, Wheaton Precious Metals has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Insider and Institutional Ownership

33.8% of Gold Royalty shares are held by institutional investors. Comparatively, 70.3% of Wheaton Precious Metals shares are held by institutional investors. 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.

Analyst Recommendations

This is a summary of recent ratings for Gold Royalty and Wheaton Precious Metals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gold Royalty	0	0	2	0	3.00
Wheaton Precious Metals	0	1	8	0	2.89

Gold Royalty currently has a consensus target price of $3.67, suggesting a potential upside of 156.41%. Wheaton Precious Metals has a consensus target price of $70.25, suggesting a potential upside of 7.86%. Given Gold Royalty’s stronger consensus rating and higher probable upside, analysts plainly believe Gold Royalty is more favorable than Wheaton Precious Metals.

Profitability

This table compares Gold Royalty and Wheaton Precious Metals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gold Royalty	-381.76%	-0.53%	-0.40%
Wheaton Precious Metals	50.44%	8.54%	8.46%

Dividends

Gold Royalty pays an annual dividend of $0.01 per share and has a dividend yield of 0.7%. Wheaton Precious Metals pays an annual dividend of $0.62 per share and has a dividend yield of 1.0%. Gold Royalty pays out -6.3% of its earnings in the form of a dividend. Wheaton Precious Metals pays out 49.2% 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 Gold Royalty and Wheaton Precious Metals”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	$6.50 million	37.19	-$26.76 million	($0.16)	-8.94
Wheaton Precious Metals	$1.02 billion	29.08	$537.64 million	$1.26	51.69

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

Summary

Wheaton Precious Metals beats Gold Royalty on 10 of the 15 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 Wheaton Precious Metals

Wheaton Precious Metals Corp. primarily sells precious metals in North America, Europe, and South America. It produces and sells gold, silver, palladium, and cobalt deposits. The company was formerly known as Silver Wheaton Corp. and changed its name to Wheaton Precious Metals Corp. in May 2017. Wheaton Precious Metals Corp. was founded in 2004 and is headquartered in Vancouver, Canada.