Nouveau Monde Graphite (NYSE:NMG) versus Rare Element Resources (OTCMKTS:REEMF) Financial Analysis

Rare Element Resources (OTCMKTS:REEMF) and Nouveau Monde Graphite (NYSE:NMG) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Earnings and Valuation

This table compares Rare Element Resources and Nouveau Monde Graphite”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rare Element Resources	N/A	N/A	-$18.45 million	($0.01)	-92.00
Nouveau Monde Graphite	N/A	N/A	-$53.48 million	($0.66)	-4.54

Rare Element Resources is trading at a lower price-to-earnings ratio than Nouveau Monde Graphite, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

41.1% of Nouveau Monde Graphite shares are held by institutional investors. 1.3% of Rare Element Resources shares are held by insiders. Comparatively, 22.7% of Nouveau Monde Graphite shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Rare Element Resources and Nouveau Monde Graphite’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rare Element Resources	N/A	-25.44%	-23.32%
Nouveau Monde Graphite	N/A	-57.99%	-37.40%

Risk and Volatility

Rare Element Resources has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Nouveau Monde Graphite has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Rare Element Resources and Nouveau Monde Graphite, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rare Element Resources	0	0	0	0	0.00
Nouveau Monde Graphite	1	2	6	0	2.56

Nouveau Monde Graphite has a consensus price target of $5.15, suggesting a potential upside of 71.95%. Given Nouveau Monde Graphite’s stronger consensus rating and higher possible upside, analysts plainly believe Nouveau Monde Graphite is more favorable than Rare Element Resources.

Summary

Nouveau Monde Graphite beats Rare Element Resources on 6 of the 11 factors compared between the two stocks.

About Rare Element Resources

Rare Element Resources Ltd. engages in the exploration of mineral properties in the United States and Canada. It holds 100% interest in the Bear Lodge property that comprises the Bear Lodge REE project; and the Sundance Gold project located in Crook County, northeast Wyoming. Rare Element Resources Ltd. is headquartered in Littleton, Colorado.

About Nouveau Monde Graphite

Nouveau Monde Graphite Inc. engages in the acquisition, exploration, development, and evaluation of mineral properties in Quebec, Canada. It primarily explores for graphite. The company’s flagship property is the 100% owned Matawinie graphite property including 176 mining claims covering an area of 9,264 hectares located in Quebec. It also involved in the real estate and trading activities. The company was formerly known as Nouveau Monde Mining Enterprises Inc. and changed its name to Nouveau Monde Graphite Inc. in February 2017. Nouveau Monde Graphite Inc. was founded in 2011 and is headquartered in Saint-Michel-Des-Saints, Canada.