Critical Review: Eldorado Gold (NYSE:EGO) versus USA Rare Earth (NASDAQ:USAR)

USA Rare Earth (NASDAQ:USAR) and Eldorado Gold (NYSE:EGO) are both mid-cap materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

69.6% of Eldorado Gold shares are owned by institutional investors. 9.1% of USA Rare Earth shares are owned by insiders. Comparatively, 0.6% of Eldorado Gold shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares USA Rare Earth and Eldorado Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
USA Rare Earth	N/A	-9.04%	-7.13%
Eldorado Gold	29.83%	10.91%	7.07%

Analyst Ratings

This is a summary of recent ratings and price targets for USA Rare Earth and Eldorado Gold, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USA Rare Earth	1	0	9	0	2.80
Eldorado Gold	0	7	6	2	2.67

USA Rare Earth presently has a consensus target price of $33.71, suggesting a potential upside of 234.14%. Eldorado Gold has a consensus target price of $46.57, suggesting a potential upside of 32.71%. Given USA Rare Earth’s stronger consensus rating and higher possible upside, research analysts plainly believe USA Rare Earth is more favorable than Eldorado Gold.

Valuation and Earnings

This table compares USA Rare Earth and Eldorado Gold”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USA Rare Earth	$1.64 million	1,505.62	-$297.56 million	($2.43)	-4.15
Eldorado Gold	$1.82 billion	5.05	$507.26 million	$2.82	12.44

Eldorado Gold has higher revenue and earnings than USA Rare Earth. USA Rare Earth is trading at a lower price-to-earnings ratio than Eldorado Gold, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

USA Rare Earth has a beta of 2.66, indicating that its stock price is 166% more volatile than the S&P 500. Comparatively, Eldorado Gold has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Summary

Eldorado Gold beats USA Rare Earth on 9 of the 15 factors compared between the two stocks.

About USA Rare Earth

USA Rare Earth, Inc. is domestic supplier of rare earth magnets and heavy rare earth elements. It is developing a vertically integrated, domestic supply chain for rare earth element magnet production, with a facility in Stillwater, Oklahoma, and mining rights to the Round Top heavy rare earth and critical minerals deposit in West Texas. The company was founded in May 2019 and is headquartered in Stillwater, OK.

About Eldorado Gold

Eldorado Gold Corporation, together with its subsidiaries, engages in the mining, exploration, development, and sale of mineral products primarily in Turkey, Canada, Greece, and Romania. The company primarily produces gold, as well as silver, lead, and zinc. It holds a 100% interest in the Kisladag and Efemçukuru mines located in Turkey; Lamaque complex located in Canada; and Olympias, Stratoni, Skouries, Perama Hill, and Sapes gold mines located in Greece, as well as the 80.5% interest in Certej development projects located in Romania. The company was formerly known as Eldorado Corporation Ltd. and changed its name to Eldorado Gold Corporation in April 1996. Eldorado Gold Corporation was incorporated in 1996 and is headquartered in Vancouver, Canada.