Osisko Gold Royalties Ltd. – Value Analysis (TORONTO:OR) : October 6, 2017

Capitalcube gives Osisko Gold Royalties Ltd. a score of 75.

Our analysis is based on comparing Osisko Gold Royalties Ltd. with the following peers – Zonte Metals Inc., Planet Ventures Inc, QMX Gold Corp. and Bear Creek Mining Corporation (ZON-CA, PXI-CA, QMX-CA and BCM-CA).

Investment Outlook

Osisko Gold Royalties Ltd. has a fundamental score of 75 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • From a peer analysis perspective, relative outperformance last month is up from a median performance last year.
  • It’s current Price/Book of 2.09 is about median in its peer group.
  • The market expects OR-CA to grow faster than its peers and for the company to improve its current ROE.
  • OR-CA has relatively low net profit margins while its asset efficiency is relatively high.
  • Change in the company’s annual revenues seems to be coming at the expense of earnings.
  • Over the last five years, OR-CA‘s return on assets has declined from above median to about median among its peers, indicating declining relative operating performance.
  • OR-CA has the financial and operating capacity to borrow quickly.

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Leverage & Liquidity

OR-CA has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 3.54% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 0%), and a well-cushioned interest coverage level of 7.05x, OR-CA can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • Of the 4 chosen peers for the company, only 1 of the stocks have an outstanding debt balance (including QMX-CA). Companies with no debt include ZON-CA, PXI-CA and BCM-CA.

OR-CA has maintained its Quick & Able profile from the recent year-end.

  • OR-CA‘s interest coverage is its lowest relative to the last five years and compares to a high of 59.07x in 2014.
  • The decrease in its interest coverage to 7.05x from 8.00x (in 2016) was also accompanied by a decrease in its peer median during this period to 7.05x from 8.00x.
  • OR-CA‘s debt-EV has declined 1.64 percentage points from last year’s high and is now below its five-year average debt-EV of 5.18.
  • Though its debt-EV decreased to 3.54% from 5.18% (in 2016), its peer median remained relatively stable during this period at 0%.
  • Relative to peers, debt-EV fell 1.64 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Zonte Metals Inc. 0 4.58 -4786.93 999
Planet Ventures Inc 0 N/A No interest exp 999
QMX Gold Corp. 6.23 2.41 -8.12 -179.96
Bear Creek Mining Corporation 0 27.19 No interest exp 999
Osisko Gold Royalties Ltd 3.54 12.75 7.05 110.89
Peer Median 0 8.66 7.05 999
Best In Class 3.54 27.19 No interest exp 999

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Company Profile

Osisko Gold Royalties Ltd. operates as an intermediate precious metal company, which engages in mining and exploration. Its assets portfolio includes Malartic and Éléonore royalties. The company was founded on April 29, 2014 and is headquartered in Montreal, Canada.


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