A Look at Osisko Gold Royalties (TSX:OR) Valuation Following Strong Earnings Growth and Dividend Confirmation

OR Royalties (TSX:OR) caught investors’ attention after releasing strong third quarter results and confirming a fourth quarter dividend. Both revenue and net income increased compared to last year, highlighting solid financial momentum.

See our latest analysis for OR Royalties.

It’s been a remarkable year for OR Royalties, with investors responding to strong quarterly growth and a freshly affirmed dividend. The stock has rallied on the back of accelerating fundamentals, delivering a 74% share price return year to date and an 83% total shareholder return over the past twelve months. Momentum appears to be building as confidence rises in the company’s long-term growth prospects.

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Yet after such a sharp rally, the key question for investors now is whether OR Royalties remains undervalued or if the current price already reflects all the company’s future growth potential.

Price-to-Earnings of 42.5x: Is it justified?

At a price-to-earnings ratio of 42.5x, OR Royalties stands well above both industry peers and the broader market. This suggests investors are paying a premium for growth.

The price-to-earnings (PE) ratio measures how much investors are willing to pay today for a dollar of earnings. In the metals and mining sector, this metric signals how the market values future profit streams relative to what peers are generating. A high ratio may reflect confidence in exceptional growth, but it could also mean expectations are getting ahead of actual performance.

Compared to the Canadian Metals and Mining industry average of 21.1x and the peer average of 21.2x, OR Royalties is trading at nearly double the norm. According to current market assessments, the stock price far exceeds both historical sector valuations and what regression analysis implies as fair value (estimated fair price-to-earnings ratio of 23.5x). The market could adjust if these high expectations are not consistently met.

Explore the SWS fair ratio for OR Royalties

Result: Price-to-Earnings of 42.5x (OVERVALUED)

However, continued overvaluation and slower than expected earnings growth could reverse sentiment, pressuring OR Royalties’ share price despite its strong recent momentum.

Find out about the key risks to this OR Royalties narrative.

Another View: What Does Our DCF Model Say?

Looking at the SWS DCF model provides a different perspective on OR Royalties' value. This approach estimates a fair value of CA$40.49 per share, which is below the current price of CA$46.73, suggesting shares may be overvalued. So, which method best captures OR’s true potential and risk?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out OR Royalties for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 885 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own OR Royalties Narrative

If these analyses spark your own ideas or you’d rather draw your own conclusions, you can explore the data and craft your perspective in just a few minutes, then Do it your way

A great starting point for your OR Royalties research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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