Loncor Gold (OTCMKTS:LONCF) and Gold Royalty (NYSE:GROY) Critical Analysis

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

Valuation & Earnings

This table compares Loncor 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
Loncor Gold	N/A	N/A	-$21.27 million	($0.14)	-2.96
Gold Royalty	$7.76 million	27.22	-$26.76 million	($0.13)	-9.62

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

Analyst Recommendations

This is a breakdown of recent ratings for Loncor Gold and Gold Royalty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Loncor Gold	0	0	0	0	0.00
Gold Royalty	0	0	3	0	3.00

Gold Royalty has a consensus price target of $3.25, indicating a potential upside of 160.00%. Given Gold Royalty’s stronger consensus rating and higher possible upside, analysts plainly believe Gold Royalty is more favorable than Loncor Gold.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Loncor Gold	N/A	-12.66%	-10.38%
Gold Royalty	-252.16%	0.46%	0.35%

Insider and Institutional Ownership

33.8% of Gold Royalty shares are held by institutional investors. 22.1% of Loncor Gold shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Loncor Gold has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Gold Royalty has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Summary

Gold Royalty beats Loncor Gold on 8 of the 13 factors compared between the two stocks.

About Loncor Gold

Loncor Gold Inc., a gold exploration company, engages in the acquisition, exploration, and development of precious metal projects in the Ngayu greenstone belt in the northeast of the Democratic Republic of the Congo and Canada. It explores for gold and platinum deposits. The company holds 84.68% interest in the Adumbi project, which consist of two mining licenses covering an area of 361 square kilometers located within the Archaean Ngayu Greenstone Belt in the Ituri and Haut Uele provinces in northeastern Congo. It also holds 100% interest in the Isiro properties that consist of 11 exploration permits covering an area of 1,884 square kilometers situated in the province of Haut Uele, northeastern Congo. In addition, Loncor Gold Inc. owns interest in North Kivu, Ngayu, Devon, Navarro, and Yindi projects. The company was formerly known as Loncor Resources Inc. and changed its name to Loncor Gold Inc. in June 2021. Loncor Gold Inc. was founded in 1993 and is headquartered in Toronto, 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.