Reviewing MP Materials (NYSE:MP) and Rare Element Resources (OTCMKTS:REEMF)

MP Materials (NYSE:MP) and Rare Element Resources (OTCMKTS:REEMF) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Earnings and Valuation

This table compares MP Materials and Rare Element Resources”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MP Materials	$203.85 million	59.95	-$65.42 million	($0.71)	-97.13
Rare Element Resources	N/A	N/A	-$18.45 million	($0.01)	-89.88

Rare Element Resources has lower revenue, but higher earnings than MP Materials. MP Materials is trading at a lower price-to-earnings ratio than Rare Element Resources, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares MP Materials and Rare Element Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MP Materials	-50.55%	-7.69%	-3.59%
Rare Element Resources	N/A	-25.44%	-23.32%

Volatility and Risk

MP Materials has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, Rare Element Resources has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for MP Materials and Rare Element Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MP Materials	1	0	14	1	2.94
Rare Element Resources	0	0	0	0	0.00

MP Materials currently has a consensus target price of $78.91, suggesting a potential upside of 14.43%. Given MP Materials’ stronger consensus rating and higher possible upside, equities research analysts clearly believe MP Materials is more favorable than Rare Element Resources.

Institutional and Insider Ownership

52.6% of MP Materials shares are held by institutional investors. 9.5% of MP Materials shares are held by company insiders. Comparatively, 1.3% of Rare Element Resources shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

MP Materials beats Rare Element Resources on 10 of the 14 factors compared between the two stocks.

About MP Materials

MP Materials Corp., together with its subsidiaries, produces rare earth materials. The company owns and operates the Mountain Pass Rare Earth mine and processing facility in North America. It holds the mineral rights to the Mountain Pass mine and surrounding areas, as well as intellectual property rights related to the processing and development of rare earth minerals. The company was founded in 2017 and is headquartered in Las Vegas, Nevada.

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.