Rare Element Resource (OTCMKTS:REEMF) and Kirkland Lake Gold (NYSE:KL) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Profitability

This table compares Rare Element Resource and Kirkland Lake Gold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rare Element Resource N/A -91.14% -43.67%
Kirkland Lake Gold 30.32% 23.51% 17.91%

Dividends

Kirkland Lake Gold pays an annual dividend of $0.12 per share and has a dividend yield of 0.4%. Rare Element Resource does not pay a dividend. Kirkland Lake Gold pays out 8.8% of its earnings in the form of a dividend.

Insider & Institutional Ownership

0.0% of Rare Element Resource shares are owned by institutional investors. Comparatively, 45.6% of Kirkland Lake Gold shares are owned by institutional investors. 2.6% of Rare Element Resource shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Rare Element Resource has a beta of 4.37, suggesting that its stock price is 337% more volatile than the S&P 500. Comparatively, Kirkland Lake Gold has a beta of -0.38, suggesting that its stock price is 138% less volatile than the S&P 500.

Valuation & Earnings

This table compares Rare Element Resource and Kirkland Lake Gold’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rare Element Resource N/A N/A -$1.76 million N/A N/A
Kirkland Lake Gold $915.91 million 7.17 $273.94 million $1.36 23.02

Kirkland Lake Gold has higher revenue and earnings than Rare Element Resource.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Rare Element Resource and Kirkland Lake Gold, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rare Element Resource 0 0 0 0 N/A
Kirkland Lake Gold 0 6 3 0 2.33

Kirkland Lake Gold has a consensus price target of $44.80, suggesting a potential upside of 43.09%. Given Kirkland Lake Gold’s higher possible upside, analysts plainly believe Kirkland Lake Gold is more favorable than Rare Element Resource.

Summary

Kirkland Lake Gold beats Rare Element Resource on 9 of the 12 factors compared between the two stocks.

Rare Element Resource Company Profile

Rare Element Resources Ltd. explores for mineral properties in the United States. The company primarily explores for gold and rare earth element (REE) deposits. It holds a 100% interest in the Bear Lodge property that comprises the Bear Lodge REE project and the Sundance Gold project located in central Crook County, northeast Wyoming. Rare Element Resources Ltd. is headquartered in Littleton, Colorado.

Kirkland Lake Gold Company Profile

Kirkland Lake Gold Ltd. engages in the acquisition, exploration, development, and operation of gold properties. It owns and operates four underground gold mines, including the Macassa, Holt, and Taylor mines located in northeastern Ontario, Canada; and the Fosterville Mine located in Victoria, Australia, as well as three milling facilities in Canada and Australia. The company was formerly known as Newmarket Gold Inc. and changed its name to Kirkland Lake Gold Ltd. in December 2016. Kirkland Lake Gold Ltd. is headquartered in Toronto, Canada.

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