Avalon Rare Metals (OTCMKTS:AVLNF – Get Free Report) and AngloGold Ashanti (NYSE:AU – Get Free Report) are both materials companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Insider and Institutional Ownership
36.1% of AngloGold Ashanti shares are owned by institutional investors. 2.4% of Avalon Rare Metals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Risk and Volatility
Avalon Rare Metals has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, AngloGold Ashanti has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Avalon Rare Metals | $40,000.00 | 551.71 | -$3.72 million | ($117.86) | -0.04 |
| AngloGold Ashanti | $11.82 billion | 4.06 | $2.64 billion | $7.46 | 12.73 |
AngloGold Ashanti has higher revenue and earnings than Avalon Rare Metals. Avalon Rare Metals is trading at a lower price-to-earnings ratio than AngloGold Ashanti, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Avalon Rare Metals and AngloGold Ashanti’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Avalon Rare Metals | -9,575.14% | -7.08% | -6.51% |
| AngloGold Ashanti | 32.19% | 38.77% | 25.72% |
Analyst Ratings
This is a summary of current recommendations for Avalon Rare Metals and AngloGold Ashanti, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Avalon Rare Metals | 0 | 1 | 0 | 0 | 2.00 |
| AngloGold Ashanti | 1 | 3 | 5 | 1 | 2.60 |
AngloGold Ashanti has a consensus target price of $113.14, indicating a potential upside of 19.10%. Given AngloGold Ashanti’s stronger consensus rating and higher possible upside, analysts clearly believe AngloGold Ashanti is more favorable than Avalon Rare Metals.
Summary
AngloGold Ashanti beats Avalon Rare Metals on 13 of the 15 factors compared between the two stocks.
About Avalon Rare Metals
Avalon Advanced Materials Inc., together with its subsidiaries, engages in the acquisition, exploration, evaluation, and development of rare metal and mineral properties primarily in Canada. The company focuses on exploring lithium, tantalum, cesium, indium, gallium, germanium, tin, yttrium, and zirconium deposits, as well as rare earth elements. Its flagship project is the 100% owned Separation Rapids Lithium Project consisting of nineteen mineral claims and one mining lease covering an area of approximately 4,414 hectares located in the Paterson Lake Area, Kenora Mining Division, Ontario. The company was formerly known as Avalon Rare Metals Inc. and changed its name to Avalon Advanced Materials Inc. in February 2016. Avalon Advanced Materials Inc. is headquartered in Toronto, Canada.
About AngloGold Ashanti
AngloGold Ashanti plc operates as a gold mining company in Africa, Australia, and the Americas. The company primarily explores for gold, as well as produces silver and sulphuric acid as by-products. Its flagship property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania. AngloGold Ashanti plc was incorporated in 1944 and is headquartered in Greenwood Village, Colorado.
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