Rare Element Resource (OTCMKTS:REEMF) and Randgold Resources (NASDAQ:GOLD) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Profitability

This table compares Rare Element Resource and Randgold Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rare Element Resource N/A -44.49% -23.19%
Randgold Resources 21.82% 6.16% 5.75%

Volatility and Risk

Rare Element Resource has a beta of 4.09, meaning that its share price is 309% more volatile than the S&P 500. Comparatively, Randgold Resources has a beta of -0.23, meaning that its share price is 123% less volatile than the S&P 500.

Insider and Institutional Ownership

0.0% of Rare Element Resource shares are owned by institutional investors. Comparatively, 39.7% of Randgold Resources shares are owned by institutional investors. 2.6% of Rare Element Resource shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Rare Element Resource and Randgold Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rare Element Resource 0 0 0 0 N/A
Randgold Resources 0 4 8 0 2.67

Randgold Resources has a consensus target price of $69.50, suggesting a potential upside of 442.12%. Given Randgold Resources’ higher possible upside, analysts plainly believe Randgold Resources is more favorable than Rare Element Resource.

Earnings & Valuation

This table compares Rare Element Resource and Randgold Resources’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rare Element Resource N/A N/A -$850,000.00 N/A N/A
Randgold Resources $1.28 billion 11.69 $278.01 million $2.92 4.39

Randgold Resources has higher revenue and earnings than Rare Element Resource.

Dividends

Randgold Resources pays an annual dividend of $0.28 per share and has a dividend yield of 2.2%. Rare Element Resource does not pay a dividend. Randgold Resources pays out 9.6% of its earnings in the form of a dividend. Randgold Resources has raised its dividend for 4 consecutive years.

Summary

Randgold Resources beats Rare Element Resource on 10 of the 13 factors compared between the two stocks.

About Rare Element Resource

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.

About Randgold Resources

Randgold Resources Ltd. engages in the exploration and development of gold deposits. Its projects include the following: Loulo-Gounkoto complex, Morila gold mine, Tongon gold mine, Kibali gold mine, and Massawa. The company was founded in August 1995 and is headquartered in St. Helier, the United Kingdom.

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