Avalon Rare Metals (OTCMKTS:AVLNF – Get Free Report) and Olympic Steel (NASDAQ:ZEUS – Get Free Report) are both small-cap materials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Profitability
This table compares Avalon Rare Metals and Olympic Steel’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% |
| Olympic Steel | 0.73% | 2.11% | 1.14% |
Valuation and Earnings
This table compares Avalon Rare Metals and Olympic Steel”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Avalon Rare Metals | $40,000.00 | 542.18 | -$3.72 million | ($117.86) | -0.04 |
| Olympic Steel | $1.90 billion | 0.28 | $22.98 million | $1.17 | 40.91 |
Olympic Steel has higher revenue and earnings than Avalon Rare Metals. Avalon Rare Metals is trading at a lower price-to-earnings ratio than Olympic Steel, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
87.1% of Olympic Steel shares are owned by institutional investors. 2.4% of Avalon Rare Metals shares are owned by company insiders. Comparatively, 13.8% of Olympic Steel shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Avalon Rare Metals and Olympic Steel, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Avalon Rare Metals | 0 | 1 | 0 | 0 | 2.00 |
| Olympic Steel | 0 | 1 | 0 | 0 | 2.00 |
Volatility & Risk
Avalon Rare Metals has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Olympic Steel has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.
Summary
Olympic Steel beats Avalon Rare Metals on 10 of the 11 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 Olympic Steel
Olympic Steel, Inc. processes, distributes, and stores metal products primarily in the United States, Canada, and Mexico. It operates in three segments: Carbon Flat Products; Specialty Metals Flat Products; and Tubular and Pipe Products. The company offers stainless steel and aluminum coil and sheet products, angles, rounds, and flat bars; alloy, heat treated, and abrasion resistant coils, sheets and plates; coated metals, including galvanized, galvannealed, electro galvanized, advanced high strength steels, aluminized, and automotive grades of steel; commercial quality, advanced high strength steel, drawing steel, and automotive grades cold rolled steel coil and sheet products; hot rolled carbon comprising hot rolled coil, pickled and oiled sheet and plate steel products, automotive grades, advanced high strength steels, and high strength low alloys; tube, pipe, and bar products, including round, square, and rectangular mechanical and structural tubing; hydraulic and stainless tubing; boiler tubing; carbon, stainless, and aluminum pipes; valves and fittings; and tin mill products, such as electrolytic tinplate, electrolytic chromium coated steel, and black plates. The company also provides cutting-to-length, slitting, shearing, blanking, tempering, stretcher-leveling, plate and laser processing, forming and machining, tube processing, finishing, and fabrication services, as well as value-added services, such as saw cutting, laser cutting, beveling, threading, and grooving services. It serves metal consuming industries, such as manufacturers and fabricators of transportation and material handling lift equipment, construction, mining and farm equipment, agriculture equipment, storage tanks, environmental and energy generation equipment, automobiles, food service, and electrical equipment, as well as general and plate fabricators, and metals service centers through direct sales force. Olympic Steel, Inc. was founded in 1954 and is based in Highland Hills, Ohio.
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