Financial Contrast: Avalon Rare Metals (OTCMKTS:AVLNF) and Cameco (NYSE:CCJ)

Avalon Rare Metals (OTCMKTS:AVLNF) and Cameco (NYSE:CCJ) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Institutional & Insider Ownership

70.2% of Cameco shares are owned by institutional investors. 2.4% of Avalon Rare Metals shares are owned by company insiders. Comparatively, 1.0% of Cameco shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Avalon Rare Metals and Cameco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avalon Rare Metals	0	0	0	0	0.00
Cameco	0	2	13	1	2.94

Cameco has a consensus price target of $117.25, suggesting a potential upside of 25.54%. Given Cameco’s stronger consensus rating and higher probable upside, analysts clearly believe Cameco is more favorable than Avalon Rare Metals.

Risk & Volatility

Avalon Rare Metals has a beta of -0.02, meaning that its stock price is 102% less volatile than the S&P 500. Comparatively, Cameco has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Valuation and Earnings

This table compares Avalon Rare Metals and Cameco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avalon Rare Metals	$40,000.00	633.47	-$3.72 million	N/A	N/A
Cameco	$2.29 billion	17.77	$125.42 million	$0.86	108.60

Cameco has higher revenue and earnings than Avalon Rare Metals.

Profitability

This table compares Avalon Rare Metals and Cameco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avalon Rare Metals	-10,634.21%	-4.50%	-4.14%
Cameco	15.24%	8.58%	5.86%

Summary

Cameco beats Avalon Rare Metals on 11 of the 13 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 Cameco

Cameco Corporation provides uranium for the generation of electricity. It operates through Uranium, Fuel Services, Westinghouse segments. The Uranium segment is involved in the exploration for, mining, and milling, purchase, and sale of uranium concentrate. The Fuel Services segment engages in the refining, conversion, and fabrication of uranium concentrate, as well as the purchase and sale of conversion services. This segment also produces CANDU reactor fuel bundles and other reactor components. The company offers nuclear fuel processing services. The Westinghouse segment engages in the manufacture of nuclear reactor technology original equipment. This segment provides products and services to commercial utilities and government agencies; and outage and maintenance services, engineering support, instrumentation and controls equipment, plant modification, and components and parts to nuclear reactors. It sells its uranium and fuel services to nuclear utilities in the Americas, Europe, and Asia. Cameco Corporation was incorporated in 1987 and is headquartered in Saskatoon, Canada.