Reviewing Gold Royalty (NYSE:GROY) and Sandstorm Gold (NYSE:SAND)

Gold Royalty (NYSE:GROY) and Sandstorm Gold (NYSE:SAND) 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 risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Institutional & Insider Ownership

33.8% of Gold Royalty shares are owned by institutional investors. Comparatively, 52.0% of Sandstorm Gold shares are owned by institutional investors. 1.5% of Sandstorm Gold shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Gold Royalty and Sandstorm Gold, as provided by MarketBeat.

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

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

Risk & Volatility

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

Valuation & Earnings

This table compares Gold Royalty and Sandstorm Gold”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	82.59	-$26.76 million	($0.13)	-11.46
Sandstorm Gold	$106.58 million	17.54	$41.72 million	$0.12	52.55

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.

Profitability

This table compares Gold Royalty and Sandstorm Gold’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%
Sandstorm Gold	20.46%	2.44%	1.86%

Summary

Sandstorm Gold beats Gold Royalty on 10 of the 14 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 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.