Contrasting North American Construction Group (NYSE:NOA) & USA Rare Earth (NASDAQ:USAR)

USA Rare Earth (NASDAQ:USAR) and North American Construction Group (NYSE:NOA) are both materials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Earnings & Valuation

This table compares USA Rare Earth and North American Construction Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USA Rare Earth	$1.64 million	2,265.15	-$297.56 million	($2.43)	-6.25
North American Construction Group	$1.34 billion	0.25	$24.22 million	$0.79	15.61

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

Profitability

This table compares USA Rare Earth and North American Construction Group’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%
North American Construction Group	2.41%	6.23%	1.50%

Risk and Volatility

USA Rare Earth has a beta of 2.58, meaning that its stock price is 158% more volatile than the S&P 500. Comparatively, North American Construction Group has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for USA Rare Earth and North American Construction Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USA Rare Earth	1	0	10	0	2.82
North American Construction Group	1	4	2	0	2.14

USA Rare Earth presently has a consensus price target of $33.71, suggesting a potential upside of 122.10%. North American Construction Group has a consensus price target of $25.75, suggesting a potential upside of 108.76%. Given USA Rare Earth’s stronger consensus rating and higher probable upside, equities analysts clearly believe USA Rare Earth is more favorable than North American Construction Group.

Institutional and Insider Ownership

75.0% of North American Construction Group shares are owned by institutional investors. 9.1% of USA Rare Earth shares are owned by company insiders. Comparatively, 9.7% of North American Construction Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

North American Construction Group beats USA Rare Earth on 9 of the 14 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 North American Construction Group

North American Construction Group Ltd. provides mining and heavy civil construction services to customers in the resource development and industrial construction sectors in Australia, Canada, and the United States. The company operates Heavy Equipment – Canada, Heavy Equipment – Australia, and Other segments. It also offers mine management services for thermal coal mines; and construction and operations support services in the Canadian oil sands region. In addition, the company provides fully maintained heavy equipment rentals and full service mine operations support at metallurgical and thermal coal mines; heavy equipment rentals to iron ore, gold and lithium producers; and heavy equipment maintenance, component remanufacturing, and full equipment rebuild services to mining companies and other heavy equipment operators, as well as supplies production-critical components to the mining and construction industry. As of December 31, 2023, it operated a heavy equipment fleet of 900 units. The company was formerly known as North American Energy Partners Inc. and changed its name to North American Construction Group Ltd. in April 2018. North American Construction Group Ltd. was incorporated in 1953 and is headquartered in Acheson, Canada.