Financial Survey: Algoma Steel Group (NASDAQ:ASTL) & Avalon Rare Metals (OTCMKTS:AVLNF)

Algoma Steel Group (NASDAQ:ASTL) and Avalon Rare Metals (OTCMKTS:AVLNF) are both small-cap materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Analyst Recommendations

This is a summary of current ratings for Algoma Steel Group and Avalon Rare Metals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Algoma Steel Group	1	3	0	0	1.75
Avalon Rare Metals	0	1	0	0	2.00

Profitability

This table compares Algoma Steel Group and Avalon Rare Metals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Algoma Steel Group	-59.04%	-211.54%	-34.40%
Avalon Rare Metals	-10,843.52%	-11.10%	-10.24%

Insider and Institutional Ownership

72.0% of Algoma Steel Group shares are held by institutional investors. 2.4% of Avalon Rare Metals shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Algoma Steel Group and Avalon Rare Metals”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Algoma Steel Group	$1.49 billion	0.34	-$704.89 million	($4.95)	-0.96
Avalon Rare Metals	$190,000.00	97.55	-$20.85 million	($118.88)	-0.03

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

Volatility & Risk

Algoma Steel Group has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500. Comparatively, Avalon Rare Metals has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Summary

Avalon Rare Metals beats Algoma Steel Group on 7 of the 12 factors compared between the two stocks.

About Algoma Steel Group

Algoma Steel Group Inc. produces and sells steel products primarily in North America. The company provides flat/sheet steel products, including temper rolling, cold rolled, hot-rolled pickled and oiled products, floor plate, and cut-to-length products for the automotive industry, hollow structural product manufacturers, and the light manufacturing and transportation industries; and plate steel products that consist of rolled, hot-rolled, and heat-treated for use in the construction or manufacture of railcars, buildings, bridges, off-highway equipment, storage tanks, ships, and military applications. Algoma Steel Group Inc. was founded in 1901 and is headquartered in Sault Ste. Marie, Canada.

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.