Critical Analysis: Ramaco Resources (NASDAQ:METC) vs. American Resources (NASDAQ:AREC)

Ramaco Resources (NASDAQ:METCGet Rating) and American Resources (NASDAQ:ARECGet Rating) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Ramaco Resources and American Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ramaco Resources 0 2 1 0 2.33
American Resources 0 0 1 0 3.00

Ramaco Resources currently has a consensus price target of $19.67, indicating a potential upside of 3.78%. American Resources has a consensus price target of $4.50, indicating a potential upside of 96.51%. Given American Resources’ stronger consensus rating and higher probable upside, analysts clearly believe American Resources is more favorable than Ramaco Resources.

Volatility and Risk

Ramaco Resources has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, American Resources has a beta of -0.28, suggesting that its share price is 128% less volatile than the S&P 500.

Institutional and Insider Ownership

63.8% of Ramaco Resources shares are held by institutional investors. Comparatively, 8.3% of American Resources shares are held by institutional investors. 52.9% of Ramaco Resources shares are held by insiders. Comparatively, 27.9% of American Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Ramaco Resources and American Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ramaco Resources 14.03% 20.80% 14.25%
American Resources -417.68% N/A -67.86%

Valuation & Earnings

This table compares Ramaco Resources and American Resources’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ramaco Resources $283.39 million 2.96 $39.76 million $0.91 20.82
American Resources $7.76 million 19.40 -$32.50 million ($0.60) -3.82

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

Summary

Ramaco Resources beats American Resources on 10 of the 13 factors compared between the two stocks.

Ramaco Resources Company Profile (Get Rating)

Ramaco Resources, Inc. produces and sells metallurgical coal. The company's development portfolio includes the Elk Creek project consisting of approximately 20,200 acres of controlled mineral and 16 seams located in southern West Virginia; the Berwind property comprising approximately 41,300 acres of controlled mineral and an area of Squire Jim seam coal deposits, which is situated on the border of West Virginia and Virginia; the Knox Creek property consisting of approximately 62,100 acres of controlled mineral that is located in Virginia; and the RAM Mine property comprising approximately 1,570 acres of controlled mineral, which is situated in southwestern Pennsylvania. The company serves blast furnace steel mills and coke plants in the United States, as well as international metallurgical coal consumers. The company was founded in 2015 and is headquartered in Lexington, Kentucky.

American Resources Company Profile (Get Rating)

American Resources Corp. engages in the extraction, processing, transportation, and distribution of metallurgical coal to the steel industry. It focuses on the operation of coal mining complexes located primarily within Pike, Knott, and Letcher Counties, Kentucky, and Wyoming County, West Virginia. The company was founded in 2006 and in headquartered in Fishers, IN.

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