Contrasting MP Materials (NYSE:MP) & AngloGold Ashanti (NYSE:AU)

AngloGold Ashanti (NYSE:AU) and MP Materials (NYSE:MP) are both materials companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and target prices for AngloGold Ashanti and MP Materials, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AngloGold Ashanti	0	2	8	2	3.00
MP Materials	2	1	13	1	2.76

AngloGold Ashanti currently has a consensus target price of $118.06, indicating a potential upside of 41.45%. MP Materials has a consensus target price of $71.92, indicating a potential upside of 87.70%. Given MP Materials’ higher probable upside, analysts clearly believe MP Materials is more favorable than AngloGold Ashanti.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AngloGold Ashanti	$9.89 billion	4.26	$2.64 billion	$7.46	11.19
MP Materials	$224.44 million	30.40	-$85.87 million	($0.34)	-112.69

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

Risk and Volatility

AngloGold Ashanti has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, MP Materials has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500.

Insider & Institutional Ownership

36.1% of AngloGold Ashanti shares are owned by institutional investors. Comparatively, 52.5% of MP Materials shares are owned by institutional investors. 8.2% of MP Materials shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares AngloGold Ashanti and MP Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AngloGold Ashanti	32.19%	38.77%	25.72%
MP Materials	-19.85%	-1.21%	-0.62%

Summary

AngloGold Ashanti beats MP Materials on 9 of the 15 factors compared between the two stocks.

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.

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.