Performance Comparison of Alamos Gold Inc. (AGI) and Weyerhaeuser Company (WY)

The shares of Alamos Gold Inc. (NYSE:AGI) and Weyerhaeuser Company (NYSE:WY) were among the active stocks of the last trading sessions. Alamos Gold Inc. (NYSE:AGI) declined to -6.17% closing at the price of $4.56 whereas the shares of Weyerhaeuser Company (NYSE:WY) declined -1.59% with the decrease of -0.45 points closing at the price of $27.86. Alamos Gold Inc. has currently decrease -17.24% in its stock over the period of 6-months while its rival Weyerhaeuser Company subtracted -23.17% in the previous 6-months.

Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.

Returns and Profitability

Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.

The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Alamos Gold Inc. (NYSE:AGI) is 0% while the ROI of Weyerhaeuser Company (NYSE:WY) is 6.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AGI’s EBITDA Margin is 7.53 whereas WY’s is 12.28.

Both the profitability ratios suggest that Weyerhaeuser Company (NYSE:WY) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Alamos Gold Inc. (NYSE:AGI) reported $0.06/share EPS for the previous quarter where analysts were predicting an EPS to be $0.03/share Thus beating the analyst Estimates with a Surprise Factor of 100 Percent. While, Weyerhaeuser Company (NYSE:WY) reported EPS of $0.44/share in the last quarter. The analysts projected EPS of $0.43/share depicting a Surprise of 2.3 Percent.

Taking a look at Earnings per Share, Alamos Gold Inc. tends to be beating the analyst estimates more than Weyerhaeuser Company. so AGI is more profitable than WY.

Technical Analysis of Alamos Gold Inc. & Weyerhaeuser Company

Moving average convergence divergence (MACD) shows that Alamos Gold Inc. (NYSE:AGI) is on a PRICE RELATIVITY trend While Weyerhaeuser Company (NYSE:WY) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Alamos Gold Inc. was in BULLISH territory and Weyerhaeuser Company was in BEARISH territory.

AGI’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While WY’s candle is BEARISH with HIGH.

EPS Growth Rate: AGI’s 0% versus WY’s 5%

Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Alamos Gold Inc. (NYSE:AGI) is predicted at 0% while Weyerhaeuser Company (NYSE:WY) stands at 5%. These numbers suggest that WY is more suitable investment in terms of EPS growth rate.

Financial Risk and Liquidity Concerns

The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of AGI stands at 0 while WY is at 2.2 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.69.

The values of the both ratios suggest that WY is more suitable investment when the liquidity and risk is the main concern.

Analyst Recommendations

While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.2 for AGI and 2.2 for WY which means AGI has Hold rating whereas WY has Hold rating.

Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for AGI is $8.82 which is 48.3% of its current price while WY has price target of 36.95 which is 24.6% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

AGI currently has price to earning P/E ratio of 101.33 whereas WY has 20.35 while the forward P/E ratio for the prior stands at 14.71 and for the later it depicts the value of 18.94.

The price to Book P/B for AGI is 0.67, Price to Sale is at 2.81 and for WY these ratios stand at 2.27 and 2.81.