Rio Tinto PLC (NYSE: RIO) and A-Mark Precious Metals (NASDAQ:AMRK) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitabiliy.

Profitability

This table compares Rio Tinto PLC and A-Mark Precious Metals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rio Tinto PLC N/A N/A N/A
A-Mark Precious Metals 0.09% 10.08% 1.40%

Analyst Ratings

This is a summary of current ratings and recommmendations for Rio Tinto PLC and A-Mark Precious Metals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rio Tinto PLC 1 3 13 1 2.78
A-Mark Precious Metals 0 1 1 1 3.00

Rio Tinto PLC currently has a consensus price target of $40.50, indicating a potential downside of 14.36%. A-Mark Precious Metals has a consensus price target of $21.53, indicating a potential upside of 31.17%. Given A-Mark Precious Metals’ stronger consensus rating and higher possible upside, analysts plainly believe A-Mark Precious Metals is more favorable than Rio Tinto PLC.

Dividends

Rio Tinto PLC pays an annual dividend of $1.70 per share and has a dividend yield of 3.6%. A-Mark Precious Metals pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. A-Mark Precious Metals pays out 33.0% of its earnings in the form of a dividend.

Risk and Volatility

Rio Tinto PLC has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, A-Mark Precious Metals has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500.

Earnings & Valuation

This table compares Rio Tinto PLC and A-Mark Precious Metals’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rio Tinto PLC $37.60 billion 1.73 $15.22 billion N/A N/A
A-Mark Precious Metals $7.40 billion 0.02 $10.53 million $0.97 16.92

Rio Tinto PLC has higher revenue and earnings than A-Mark Precious Metals.

Insider & Institutional Ownership

7.2% of Rio Tinto PLC shares are owned by institutional investors. Comparatively, 19.9% of A-Mark Precious Metals shares are owned by institutional investors. 43.0% of A-Mark Precious Metals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

About Rio Tinto PLC

Rio Tinto plc is a mining and metals company. The Company’s business is finding, mining and processing mineral resources. The Company’s segments include Iron Ore, Aluminium, Copper & Diamonds, Energy & Minerals and Other Operations. The Company operates an iron ore business, supplying the global seaborne iron ore trade. Its Iron Ore product operations are located in the Pilbara region of Western Australia. The Aluminium business includes bauxite mines, alumina refineries and aluminum smelters. Its bauxite mines are located in Australia, Brazil and Guinea. The Copper & Diamonds segment has managed operations in Australia, Canada, Mongolia and the United States, and non-managed operations in Chile and Indonesia. The Energy & Minerals segment consists of mining, refining and marketing operations in over 10 countries, across six sectors: borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium.

About A-Mark Precious Metals

A-Mark Precious Metals, Inc. is a precious metal trading company. The Company is a wholesaler of gold, silver, platinum and palladium bullion and related products, including bars, wafers, grain and coins. It distributes gold and silver coins and bars from sovereign and private mints; provides financing for the purchase of bullion and numismatics; offers storage for bullion, and offers complementary products, such as consignment, customized finance and liquidity programs, such as repurchase (Repo) accounts, and trade quotes in a variety of foreign currencies. It operates through various business units for accounting purposes, including Industrial, Coin and Bar, Trading, Finance, Collateral Finance Corporation, Transcontinental Depository Services and Logistics. It is an authorized distributor of gold and silver coins for sovereign mints and various private mints. The sovereign mints include the United States Mint, the Australian (Perth) Mint and the Austrian Mint, among others.

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