Gold Royalty (NYSE:GROY – Get Free Report) and Pan American Silver (NYSE:PAAS – Get Free Report) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.
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% |
Dividends
Gold Royalty pays an annual dividend of $0.01 per share and has a dividend yield of 0.8%. Pan American Silver pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. Gold Royalty pays out -7.7% of its earnings in the form of a dividend. Pan American Silver pays out -235.3% 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. Pan American Silver is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gold Royalty | 0 | 0 | 3 | 0 | 3.00 |
| Pan American Silver | 0 | 1 | 4 | 0 | 2.80 |
Gold Royalty presently has a consensus target price of $3.25, indicating a potential upside of 166.39%. Pan American Silver has a consensus target price of $25.42, indicating a potential upside of 18.77%. Given Gold Royalty’s stronger consensus rating and higher probable upside, analysts plainly believe Gold Royalty is more favorable than Pan American Silver.
Risk and Volatility
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.
Insider and Institutional Ownership
33.8% of Gold Royalty shares are held by institutional investors. Comparatively, 55.4% of Pan American Silver shares are held by institutional investors. 12.9% of Pan American Silver shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Gold Royalty and Pan American Silver”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gold Royalty | $7.76 million | 26.57 | -$26.76 million | ($0.13) | -9.38 |
| Pan American Silver | $2.67 billion | 2.91 | -$103.70 million | ($0.17) | -125.88 |
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 10 of the 16 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.
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