Critical Survey: MP Materials (NYSE:MP) versus McEwen (NYSE:MUX)

MP Materials (NYSE:MP) and McEwen (NYSE:MUX) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Risk and Volatility

MP Materials has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500. Comparatively, McEwen has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MP Materials	$224.44 million	36.50	-$85.87 million	($0.42)	-109.56
McEwen	$197.55 million	5.18	$34.43 million	$1.18	14.52

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

Institutional & Insider Ownership

52.5% of MP Materials shares are held by institutional investors. Comparatively, 17.0% of McEwen shares are held by institutional investors. 8.2% of MP Materials shares are held by company insiders. Comparatively, 14.8% of McEwen shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares MP Materials and McEwen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MP Materials	-28.00%	-2.27%	-1.13%
McEwen	31.40%	13.65%	9.05%

Analyst Recommendations

This is a summary of current recommendations for MP Materials and McEwen, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MP Materials	1	0	17	2	3.00
McEwen	0	2	3	0	2.60

MP Materials currently has a consensus price target of $79.25, indicating a potential upside of 72.23%. McEwen has a consensus price target of $29.83, indicating a potential upside of 74.07%. Given McEwen’s higher possible upside, analysts clearly believe McEwen is more favorable than MP Materials.

Summary

McEwen beats MP Materials on 8 of the 15 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 McEwen

McEwen Mining Inc. engages in the exploration, development, production, and sale of gold and silver. It also explores for copper deposits. The company owns 100% interests in the El Gallo and Fenix projects located in Mexico; and the Black Fox Mine and Stock Mill, Grey Fox, and Froome and Tamarack properties in Canada. It also owns interests in the Fuller, Davidson-Tisdale, Buffalo Ankerite, and Paymaster exploration properties located in Canada; and a 49% interest in the San José mine located in Argentina. In addition, the company owns 100% interests in the Gold Bar and Tonkin properties located in Eureka County, Nevada; and interests in the Los Azules copper project located in the cordilleran region in the province of San Juan, Argentina. The company was formerly known as US Gold Corporation and changed its name to McEwen Mining Inc. in January 2012. McEwen Mining Inc. was founded in 1979 and is headquartered in Toronto, Canada.