Critical Contrast: Gold Royalty (NYSE:GROY) and Platinum Group Metals (NYSE:PLG)

Platinum Group Metals (NYSE:PLG) and Gold Royalty (NYSE:GROY) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Insider and Institutional Ownership

16.3% of Platinum Group Metals shares are owned by institutional investors. Comparatively, 33.8% of Gold Royalty shares are owned by institutional investors. 0.0% of Platinum Group Metals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Platinum Group Metals and Gold Royalty, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Platinum Group Metals	0	0	0	0	0.00
Gold Royalty	0	0	2	0	3.00

Gold Royalty has a consensus price target of $3.58, indicating a potential upside of 167.41%. Given Gold Royalty’s stronger consensus rating and higher probable upside, analysts clearly believe Gold Royalty is more favorable than Platinum Group Metals.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Platinum Group Metals	N/A	-11.73%	-11.24%
Gold Royalty	-252.16%	0.46%	0.35%

Volatility & Risk

Platinum Group Metals has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500. Comparatively, Gold Royalty has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Earnings & Valuation

This table compares Platinum Group Metals and Gold Royalty”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Platinum Group Metals	N/A	N/A	-$5.66 million	($0.07)	-23.00
Gold Royalty	$7.76 million	29.18	-$26.76 million	($0.13)	-10.31

Platinum Group Metals has higher earnings, but lower revenue than Gold Royalty. Platinum Group Metals 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

Gold Royalty beats Platinum Group Metals on 8 of the 13 factors compared between the two stocks.

About Platinum Group Metals

Platinum Group Metals Ltd. engages in the exploration and development of platinum and palladium properties. It explores for palladium, platinum, gold, copper, nickel, and rhodium deposits. The company holds 50.02% interest in the Waterberg project located on the Northern Limb of the Bushveld Igneous Complex, South Africa. It also develops next-generation battery technology using platinum and palladium. Platinum Group Metals Ltd. was founded in 2000 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.