Contrasting Reliance (NYSE:RS) and Lithium Americas (NYSE:LAC)

Reliance (NYSE:RS) and Lithium Americas (NYSE:LAC) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, profitability, risk, analyst recommendations, valuation and dividends.

Earnings & Valuation

This table compares Reliance and Lithium Americas”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reliance	$14.29 billion	1.37	$739.40 million	$15.33	25.02
Lithium Americas	N/A	N/A	-$122.09 million	($0.41)	-7.11

Reliance has higher revenue and earnings than Lithium Americas. Lithium Americas is trading at a lower price-to-earnings ratio than Reliance, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Reliance has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Lithium Americas has a beta of 2.47, indicating that its stock price is 147% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Reliance and Lithium Americas, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reliance	1	5	2	0	2.12
Lithium Americas	1	9	2	0	2.08

Reliance currently has a consensus price target of $363.50, indicating a potential downside of 5.21%. Lithium Americas has a consensus price target of $5.44, indicating a potential upside of 86.77%. Given Lithium Americas’ higher possible upside, analysts plainly believe Lithium Americas is more favorable than Reliance.

Insider and Institutional Ownership

79.3% of Reliance shares are held by institutional investors. 0.4% of Reliance shares are held by company insiders. Comparatively, 0.7% of Lithium Americas shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Reliance and Lithium Americas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reliance	5.42%	11.37%	7.77%
Lithium Americas	N/A	-10.70%	-4.41%

Summary

Reliance beats Lithium Americas on 9 of the 12 factors compared between the two stocks.

About Reliance

Reliance, Inc. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was formerly known as Reliance Steel & Aluminum Co. and changed its name to Reliance, Inc. in February 2024. Reliance, Inc. was founded in 1939 and is based in Scottsdale, Arizona.

About Lithium Americas

Lithium Americas Corp. engages in the exploration and development of lithium properties in the United States and Canada. It holds a 100% interest in the Thacker Pass project located in northern Nevada, as well as investments in exploration properties in the United States and Canada. Lithium Americas Corp. was incorporated in 2023 and is headquartered in Vancouver, Canada.