Head-To-Head Analysis: Avalon Rare Metals (OTCMKTS:AVLNF) & AngloGold Ashanti (NYSE:AU)

AngloGold Ashanti (NYSE:AU) and Avalon Rare Metals (OTCMKTS:AVLNF) are both materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Insider and Institutional Ownership

36.1% of AngloGold Ashanti shares are owned by institutional investors. 2.4% of Avalon Rare Metals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

AngloGold Ashanti has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Avalon Rare Metals has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Valuation & Earnings

This table compares AngloGold Ashanti and Avalon Rare Metals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AngloGold Ashanti	$9.89 billion	4.80	$2.64 billion	$7.46	12.62
Avalon Rare Metals	$40,000.00	530.68	-$3.72 million	($117.86)	-0.04

AngloGold Ashanti has higher revenue and earnings than Avalon Rare Metals. Avalon Rare Metals is trading at a lower price-to-earnings ratio than AngloGold Ashanti, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AngloGold Ashanti	32.19%	38.77%	25.72%
Avalon Rare Metals	-9,575.14%	-7.08%	-6.51%

Analyst Ratings

This is a breakdown of current recommendations for AngloGold Ashanti and Avalon Rare Metals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AngloGold Ashanti	0	3	5	1	2.78
Avalon Rare Metals	0	1	0	0	2.00

AngloGold Ashanti currently has a consensus target price of $122.83, indicating a potential upside of 30.50%. Given AngloGold Ashanti’s stronger consensus rating and higher probable upside, analysts clearly believe AngloGold Ashanti is more favorable than Avalon Rare Metals.

Summary

AngloGold Ashanti beats Avalon Rare Metals on 13 of the 15 factors compared between the two stocks.

About AngloGold Ashanti

AngloGold Ashanti plc operates as a gold mining company in Africa, Australia, and the Americas. The company primarily explores for gold, as well as produces silver and sulphuric acid as by-products. Its flagship property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania. AngloGold Ashanti plc was incorporated in 1944 and is headquartered in Greenwood Village, Colorado.

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.