Financial Comparison: Gold Royalty (NYSE:GROY) versus Sandstorm Gold (NYSE:SAND)

Sandstorm Gold (NYSE:SAND) and Gold Royalty (NYSE:GROY) are both small-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sandstorm Gold	20.46%	2.44%	1.86%
Gold Royalty	-252.16%	0.46%	0.35%

Valuation and Earnings

This table compares Sandstorm Gold and Gold Royalty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sandstorm Gold	$106.58 million	17.54	$41.72 million	$0.12	52.55
Gold Royalty	$3.05 million	82.59	-$26.76 million	($0.13)	-11.46

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

Volatility and Risk

Sandstorm Gold has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, Gold Royalty has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sandstorm Gold and Gold Royalty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sandstorm Gold	0	2	2	0	2.50
Gold Royalty	0	0	3	0	3.00

Sandstorm Gold presently has a consensus target price of $8.50, indicating a potential upside of 34.81%. Gold Royalty has a consensus target price of $3.31, indicating a potential upside of 122.32%. Given Gold Royalty’s stronger consensus rating and higher probable upside, analysts plainly believe Gold Royalty is more favorable than Sandstorm Gold.

Insider and Institutional Ownership

52.0% of Sandstorm Gold shares are held by institutional investors. Comparatively, 33.8% of Gold Royalty shares are held by institutional investors. 1.5% of Sandstorm Gold shares are held by 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.

Summary

Sandstorm Gold beats Gold Royalty on 10 of the 14 factors compared between the two stocks.

About Sandstorm Gold

Sandstorm Gold Ltd. operates as a gold royalty company. The company focuses on acquiring royalties and gold and other metals purchase agreements from companies that have advanced stage operating mines. It offers upfront payments for companies to acquire a stream and receives the right to purchase a percentage of a mine's production for the life of the mine. The company has a portfolio of 243 streams and royalties. It primarily has operations in Canada, Mexico, the United States, Mongolia, Burkina Faso, Ecuador, South Africa, Ghana, Botswana, Cote D'Ivoire, Argentina, Brazil, Chile, Peru, Egypt, Ethiopia, Guyana, Paraguay, French Guiana, Turkey, Sweden, Fiji, and Australia. The company was formerly known as Sandstorm Resources Ltd. and changed its name to Sandstorm Gold Ltd. in February 2011. Sandstorm Gold Ltd. was incorporated in 2007 and is headquartered in Vancouver, Canada.

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.